KDDL Limited€¦ · KDDL Limited (CIN - L33302HP1981PLC008123) Registered Oﬃce: Plot No 3, Sector-III, Parwanoo, Dis. Solan, (H.P.) - 173220 Email: [email protected],

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KDDL Limited(CIN - L33302HP1981PLC008123)

Registered Office: Plot No 3, Sector-III, Parwanoo, Dis�. Solan, (H.P.) - 173220Email: [email protected], Website: www.kddl.com

Phone: 0172-2548223/24 & 27, Fax: 0172-2548302

NOTICENOTICE is hereby given that the 38�� Annual General Mee�ng of KDDL Limited will be held at Hotel Timber Trail Resorts, Parwanoo, Dis�. Solan (H.P.) - 173220 on Saturday, 14�� July 2018 at 12.30 p.m. to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Financial Statements of the Company (Standalone as well as Consolidated) for the financial year ended 31�� March, 2018, the reports of the Board of Directors and Auditors thereon.

2. To consider and declare final dividend of Rs. 2.50 per equity share for the financial year 2017-18.

3. To re- appoint Mr. Sanjeev Kumar Masown, who re�res by rota�ons at this Annual General Mee�ng and being eligible, offers himself for re-appointment

SPECIAL BUSINESS:

4. Authorisa�on for borrowings by way of unsecured fixed deposits from shareholders of the Company.

To consider and if thought fit, to pass, with or without modifica�on(s), the following resolu�on as an Ordinary Resolu�on:

“RESOLVED THAT in accordance with the provisions of Sec�on 73 and other applicable provisions, if any, of the Companies Act, 2013 (“ the act”) and the rules made there under (including any statutory modifica�on(s) there of for the �me being in force), approval of the shareholders of theCompany, be and is hereby, accorded to the Board of Directors of the Company to invite and accept from its members by way of unsecured Fixed Deposits subject to compliance of all the condi�ons and maximum limits as provided under Sec�on 73 of the act or any other applicable provisions of the act read with rules made there under.

RESOLVED FURTHER THAT the Deposits accepted by the Company, may be cumula�ve or non-cumula�ve as per the scheme framed by the Company and carrying rates of interest for periods varying from one year to three years specified in the Circular to be specifically approved by the Board of Directors of the Company.

RESOLVED FURTHER THAT the Board of Directors, be and is hereby, specifically authorised to do all such acts, deeds and things as may be necessary to give effect to the above resolu�on and to se�le any ques�on, difficulty or doubt that may arise in this regard.”

IMPORTANT NOTES:

1. The Register of Members and the Share Transfer books of the Company will remain closed from 7�� July, 2018 to 14�� July, 2018 (both days inclusive) for the purpose of 38�� Annual General Mee�ng (AGM) and payment of final dividend for the financial year 2017-18, if declared at AGM.

KDDL Limited

By Order of the Board

Raman SoodCompany Secretary

Membership no. F3722

Date: 14 May, 2018 Place: Gurugram, Haryana

2. An Explanatory Statement pursuant to Sec�on 102 (1) of the Companies Act, 2013, se�ng out the details pertaining to Special Business at the mee�ng, is annexed hereto.

3. A member en�tled to a�end and vote at the Annual General Mee�ng (the “Mee�ng/AGM”) is en�tled to appoint a proxy to a�end and vote on a poll instead of himself and the proxy need no be a member of the Company. The instrument appoin�ng the proxy in order to be effec�ve, should be duly stamped, filled, signed and must, be deposited at the registered office of the Company not less than forty eight hours before the commencement of the Mee�ng.

A person can act as a proxy on behalf of members not exceeding fi�y and holding on the aggregate not more than ten percent of the total share capital of the Company carrying vo�ng rights.

A member holding more than ten percent of the total share capital of the Company carrying vo�ng rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder.

4. Members holding shares in electronic form are hereby informed that bank par�culars registered against their respec�ve depository accounts will be used by the Company for payment of dividend. The Company or its Registrars cannot act on any request received directly from the Members holding shares in electronic form for any change of bank par�culars or bank mandates. Such changes are to be advised only to the Depository Par�cipant of the Members. Members holding shares in physical form and are desirous of either registering bank par�culars or changing bank par�culars already registered against their respec�ve folios for payment of dividend are requested to write to the Company/RTA.

5. In accordance with the provisions of Sec�on 124 of the Companies Act, 2013 and rules made their under, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the due date is required to be transferred to the Investor Educa�on and Protec�on Fund (IEPF), cons�tuted by the Central Government. In terms of the provisions of nvestor Educa�on and Protec�on Fund Authority (Accoun�ng, Audit, Transfer & IRefund) Rules, 2016, the ompany has uploaded the details of unpaid and unclaimed amount lying with the CCompany on its website .

6. To prevent fraudulent transac�ons, members are advised to exercise due diligence and no�fy the Company of any change in address or demise of any member as soon as possible. Members are also advised not to leave their demat account(s) dormant for long. Periodic statement of holdings should be obtained from the concerned Depository Par�cipant and holdings should be verified.

7. The Securi�es and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every par�cipant in securi�es market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their Depository Par�cipants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Company.

8. As required under regula�ons 36 (3) of the SEBI (Lis�ng Obliga�ons and Disclosure Requirements) Regula�ons, 2015, the relevant details of Director re�ring by rota�on and/or seeking re-appointment at the ensuing AGM are furnished as annexure A to this no�ce of AGM.

9. The No�ce of 38�� Annual General Mee�ng inter alia indica�ng the process and manner of e-vo�ng along with A�endance Slip and Proxy Form along with the Annual Report 2017-18 is being sent by electronic mode to those Members whose e-mail addresses are registered with the Company/Depositories, unless any Member has requested for a physical copy of the same. For Members who have not registered their e-mail addresses, physical copies are being set by the permi�ed mode.

10. The Shareholders who have not registered their e-mail address are requested to update their e-mail addresses with their depository par�cipants to enable the Company to send all the communica�ons including Annual Report, No�ces, Circulars, etc. electronically.

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KDDL Limited

11. Members may also note that the No�ce of 38�� Annual General Mee�ng and the Annual Report for 2017-18 will also be available on the Company's website www. kddl.com for their download. The physical copies of the aforesaid documents will also be available at the Company's Registered Office for inspec�on during normal business hours on all working days. Even a�er registering for e-communica�on, members are en�tled to receive such communica�on in physical form, upon making a request for the same, by post free of cost. For any communica�on, the shareholders may also send requests to the Company's investor email id: [email protected].

12. Corporate Members intending to send their authorized representa�ves to a�end the Mee�ng pursuant to Sec�on 113 of the Companies Act, 2013 are requested to send to the company a cer�fied copy of the Board Resolu�on authorizing their representa�ve to a�end and vote on their behalf at the Mee�ng.

13. The Register of Directors and Key Managerial Personnel and their shareholding maintained under Sec�on 170 of the Companies Act, 2013 and the Register of Contracts or Arrangements in which the Directors are interested maintained under Sec�on 189 of the Companies Act, 2013 will be available for inspec�on by the members at the AGM.

14. Vo�ng through electronic means:

I. In compliance with the provisions of Sec�on 108 of the Companies Act, 2013, read with Rule 20 of the Companies (Management and Administra�on) Rules, 2014, as amended and the provisions of Regula�on 44 of the Securi�es and Exchange Board of India (Lis�ng Obliga�ons and Disclosure Requirements) Regula�ons, 2015, the Members are provided with the facility to cast their vote electronically, through the e-vo�ng services provided by Karvy Computershare Private Limited (Karvy) on all resolu�ons set forth in this No�ce, from a place other than the venue of the Mee�ng (Remote e-vo�ng).

(A) In case a Member receives an email from Karvy [for Members whose email IDs are registered with the Company/Depository Par�cipants (s)]:

I. Launch internet browser by typing the URL: h�ps://evo�ng.karvy.com.

ii. Enter the login creden�als (i.e. User ID and password). In case of physical folio, User ID will be EVEN (E-Vo�ng Event Number) xxxx followed by folio number. In case of Demat account, User ID will be your DP ID and Client ID. However, if you are already registered with Karvy for e-vo�ng, you can use your exis�ng User ID and password for cas�ng your vote.

iii. A�er entering these details appropriately, click on “LOGIN”.

iv. You will now reach password change menu wherein you are required to mandatorily change your password. The new password shall comprise of minimum 8 characters with at least one upper case (A- Z), one lower case (a-z), one numeric value (0-9) and a special character (@,#,$, etc.,). The system will prompt you to change your password and update your contact details like mobile number, email ID etc. on first login. You may also enter a secret ques�on and answer of your choice to retrieve your password in case you forget it. It is strongly recommended that you do not share your password with any other person and that you take utmostcare to keep your password confiden�al.

v. You need to login again with the new creden�als.

vi. On successful login, the system will prompt you to select the “EVENT” i.e., 'Name of the Company”

vii. On the vo�ng page, enter the number of shares (which represents the number of votes) as on the Cut-off Date under “FOR/AGAINST” or alterna�vely, you may par�ally enter any number in “FOR” and par�ally “AGAINST” but the total number in “FOR/AGAINST” taken together shall not exceed your total shareholding as men�oned herein above. You may also choose the op�on ABSTAIN. If the Member does not indicate either “FOR” or “AGAINST” it will be treated as “ABSTAIN” and the shares held will not be counted under either head.

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KDDL Limited

viii. Members holding mul�ple folios/demat accounts shall choose the vo�ng process separately for each folio/demat accounts.

ix. Vo�ng has to be done for each item of the no�ce separately. In case you do not desire to cast your vote on any specific item, it will be treated as abstained.

x. You may then cast your vote by selec�ng an appropriate op�on and click on “Submit”.

xi. A confirma�on box will be displayed. Click “OK” to confirm else “CANCEL” to modify. Once you have voted on the resolu�on (s), you will not be allowed to modify your vote. During the vo�ng period, Members can login any number of �mes �ll they have voted on the Resolu�on(s).

xii. Corporate/Ins�tu�onal Members (i.e. other than Individuals, HUF, NRI etc.) are also required to send scanned cer�fied true copy (PDF Format) of the Board Resolu�on/Authority Le�er etc., together with a�ested specimen signature(s) of the duly authorised representa�ve(s), to the Scru�nizer at email [email protected] with a copy marked to evo�[email protected]. The scanned image of the above men�oned documents should be in the naming format “ Corporate Name_Event No.”

(B) In case of Members receiving physical copy of No�ce [for Members whose email IDs are not registered with the Company/Depository Par�cipants (s)]:

i. E-Vo�ng Event Number – XXXX (EVEN), User ID and Password is provided in the A�endance Slip.

ii. Please follow all steps from Sl. No. (i) to (xii) above to cast your vote by electronic means.

II. Vo�ng at AGM: The Members, who have not cast their vote through Remote e-vo�ng can exercise their vo�ng rights at the AGM. The Company will make necessary arrangements in this regard at the AGM Venue. The facility for vo�ng through electronic vo�ng system ('Insta Poll') shall be made available at the Mee�ng. Members who have already cast their votes by Remote e-vo�ng are eligible to a�end the Mee�ng; however those Members are not en�tled to cast their vote again in the Mee�ng.

A Member can opt for only single mode of vo�ng i.e. through Remote e-vo�ng or vo�ng at the AGM. If a Member casts votes by both modes then vo�ng done through Remote e-vo�ng shall prevail and vote at the AGM shall be treated as invalid.

OTHER INSTRUCTIONS

a. In case of any query and/or grievance, in respect of vo�ng by electronic means, Members may refer to the Help & Frequently Asked Ques�ons (FAQs) and E-vo�ng user manual available at the download sec�on of h�ps://evo�ng.karvy.com (Karvy Website) or contact Mr. Suresh Babu D, (Unit: KDDL Limited) of Karvy Computershare Private Limited, Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad - 500 032 or at evo�[email protected] or phone no. 040 – 6716 1500 or call Karvy's toll free No. 1-800-34-54-001 for any further clarifica�ons.

b. You can also update your mobile number and e-mail id in the user profile details of the folio which may be used for sending future communica�on(s).

c. The remote e-vo�ng period commences on 11�� July, 2018 (10.00 A.M. IST) and ends on 13�� July, 2018 (5.00 P.M.IST). During this period, Members of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date of 7�� July, 2018, may cast their votes electronically. A person who is not a Member as on the cut-off date should treat this No�ce for informa�on purposes only. The remote e-vo�ng module shall be disabled for vo�ng therea�er. Once the vote on a resolu�on(s) is cast by the Member, the Member shall not be allowed to change it subsequently.

d. The vo�ng rights of Members shall be in propor�on to their share of the paid up equity share capital of the Company as on the cut-off date i.e. 7�� July, 2018.

KDDL Limited

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e. In case a person has become a Member of the Company a�er dispatch of AGM No�ce but on or before the cut-off date for E-vo�ng i.e., 7�� July, 2018, he/she may obtain the User ID and Password in the manner as men�oned below :

i. If the mobile number of the member is registered against Folio No./ DP ID Client ID, the member may sendSMS: MYEPWD <space> E-Vo�ng Event Number+Folio No. or DP ID Client ID to 9212993399

Example for NSDL:

MYEPWD <SPACE> In12345612345678

Example for CDSL:

MYEPWD <SPACE> 1402345612345678

Example for Physical:

MYEPWD <SPACE>

ii. If e-mail address or mobile number of the member is registered against Folio No. / DP ID Client ID, then on the home page of h�ps://evo�ng.karvy.com, the member may click “Forgot Password” and enter Folio No. or DP ID Client ID and PAN to generate a password.

iii. Member may call Karvy's toll free number 1800-3454-001.

iv Member may send an e-mail request to evo�[email protected]. However, Karvy shall endeavour to send User ID and Password to those new Members whose mail ids are available

15. All documents referred to in the accompanying No�ce and the Explanatory Statement shall be open for inspec�on at the Registered Office of the Company during normal business hours (11.00 a.m. to 2.00 p.m.) on all working days except on holiday, up to and including the date of the Annual General Mee�ng of the Company.

EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

ITEM NO. 4

Sec�on 73(2) of the Companies Act, 2013 makes it mandatory for the Company to obtain approval of General Mee�ng before accep�ng any borrowing from the shareholder by way of Fixed Deposits.

As the condi�ons and maximum limits for accep�ng deposits from the Shareholders has been laid down in the Companies (Acceptance of Deposits) Rules, 2014 so approval of the shareholders is required for accep�ng deposits a�er complying with all the condi�ons stated in Sec�on 73(2) of the Act and within the limits prescribed under the Companies (Acceptance of Deposits) Rules, 2014.

In view of above, it is therefore necessary for the shareholders to pass an ordinary resolu�on required under sec�on 73(2) and other applicable provisions of the Companies Act, 2013 as set out at Item No 4 of the no�ce.

None of the Directors of the Company and /or Key Managerial Personnel of the Company and their rela�ves is concerned or interested in the resolu�on.

The Board recommends the Special Resolu�on set out at item no. 4 of the no�ce for the approval of the Members.

By Order of the Board

Raman SoodCompany Secretary

Membership no. F3722

Date: 14 May, 2018 Place: Gurugram, Haryana

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KDDL Limited

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Annexure A

Brief Resume of the Director being re-appointed at the Annual General Mee�ng of the Company :

Name of the Director : Sanjeev Kumar Masown

Date of Birth : 30th September, 1969

Date of first

Appointment

:

30th

May, 2016 as an Addi�onal Director

Qualifica�on and

experience in specific

func�onal areas

:

List of companies in

which he holds

Directorship

: Satva Jewellery & Design Limited


which he holds the

membership of the

Commi�ee

:

KDDL

Limited

Stakeholders

Rela�onship

Commi�ee

Member

Disclosure of

rela�onships between

directors inter - se;

Not Applicable

Shareholding as on 31��

March, 2018

2,000 Equity Shares

He is M.Com and Cost & Management Accountant (CMA).

He has more than 25 years of experience in different

manufacturing Companies. He is also Chief Financial Officer

(CFO) of the Company since 2011 In addi�on to his role as

CFO, he is the Business Head for Precision Engineering,

Watch Dials and Packaging business of the Company.

DIRECTORS' REPORTDear Members,

thYour Directors present this 38 Annual Report together with the Audited Accounts of the Company for the

stfinancial year ended 31 March, 2018.

OPERATIONS AND PROSPECTS

Financial Results (Standalone and Consolidated)

The summary of opera�ng results for the year 2017-18 and appropria�on of divisible profits is given below:

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KDDL Limited

PERFORMANCE AND PROJECTIONS

During the year under review, the Company achieved consolidated sales revenue of Rs. 5084 million against Rs. 4630 million in the previous year, registering a healthy growth of 9.8%. Profit before tax improved from Rs. 35.8 million to Rs. 252.4 million.

Sales revenue from manufacturing opera�ons on standalone basis grew by 14% to Rs. 1520 Million from Rs. 1333 Million in the previous year. The company earned net profit a�er tax of Rs. 140.7 million against Rs. 75.2 million in the previous year.

Sales revenue in ETHOS, the retail business of the Company improved from Rs. 3270 million in the previous year to Rs. 3578 million, registering a growth of 9.4%. Retail business segment reported profit before tax of Rs. 52 million against the loss before tax of Rs 84.5 million in previous year.

2017-18 2016-17 2017-18 2016-17

Total Income 1520.4 1333.3 5084.9 4629.9

Profit before interest, deprecia�on and excep�onal item 322.3 243.3 494.3 294.5

Less: Finance Cost 48.3 55.2 120.3 143.1

Gross Profit 274.0 188.1 374.0 151.4

Less: Deprecia�on and amor�sa�on 74.0 72.5 121.3 116.1

Profit before Share of Profit of an associate 200.0 115.6 252.7 35.3

Share of Profit of an associate -0.3 0.5

Profit Before tax 200.0 115.6 252.4 35.8

Less: Tax Expense 59.3 40.4 70.7 17.2

Net Profit / (Loss) for the Year 140.7 75.2 181.7 18.6

Other Comprehensive Income / (Loss) (OCI) -3.0 -0.3 1.9 -6.1

Total Comprehensive Income / (Loss) for the period 137.7 74.9 183.6 12.5

Add: Profit brought forward from previous year 171.3 116.1 -18.8 -4.0

Profit available for appropria�on 312.0 191.3 162.9 14.6

Transfer to Minority reserve 16.3 -5.6

Proposed Dividend 16.3 0 16.3 0.0

Corporate Dividend Tax 3.3 0 3.3 0.0

Transfer to General Reserve 40 20 40.0 20.0

Dividend on Cumula�ve Preference Shares (Net of Excess Provision) 0 -52.2 19.0

Total Appropria�on 59.6 20 23.7 33.4

Surplus carried forward to Balance Sheet 252.4 171.3 139.2 -18.8

0

Amount in Rs millions

Par�culars

Standalone Consolidated

Manufacturing Business Segments

The main revenue of the manufacturing business is from watch components segment. The Swiss watch market,

the main des�na�on for our exports, which was declining con�nuously for last 2 years, recovered during the year

and witnessed a growth of 2.7% compared to previous year. On the other hand, the domes�c watch market has

con�nued to grow.

Due to improved market condi�ons revenue of the company from watch components improved by 12.5%; major

growth of 29% was contributed by the domes�c market whereas exports revenue improved by 4.6%. The other

major segment of revenue is from the precision engineering business, wherein the company registered a healthy

growth of 31% over the previous year. The revenue growth from domes�c and exports market was 39% and 16%

respec�vely. The revenue from ornamental packaging business of the company witnessed a growth of 8.8%.

As we con�nue to move up the value chain in the watch component manufacture. We are implemen�ng mul�ple

ini�a�ves to enhance capabili�es to manufacture more complex products and improved produc�vity. We

con�nue to focus on manufacturing excellence with the goals of world class delivery compliance, quality and �me

to market (TAT).

The revenue from the precision engineering business of the Company is expected to maintain a healthy growth as

we con�nue to expand our capabili�es and capacity. Your company has established its reputa�on as a quality

supplier with the ability to meet sophis�cated customer needs. By focusing on the vital levers of opera�onal

performance while adding key technical capabili�es and show-casing our capabili�es at leading interna�onal

trade exhibi�ons and on digital pla�orms, we are confident of healthy growth and returns in the ensuing periods.

The expansion project for the precision engineering business was delayed due to heavy rains in Bangalore but

now the progress is as per revised schedule. We have already commenced par�al opera�ons and the new facility

will be fully func�onal by the second half of FY 2019. As a part of the expansion, we are shi�ing and consolida�ng

our exis�ng precision engineering manufacturing facili�es also at the new loca�on. The Company con�nues to

believe that this business segment will be a major source of growth in the future.

Retail Business Segments:

FY17-18 began on a challenging note for the luxury watch retail business. The a�er effects of many regulatory

changes con�nued to have an impact on the performance of the business in the first half of the year. These

regulatory changes included the introduc�on of PAN requirement for transac�ons above Rs. 2 lakhs, requirement

for collec�ng TCS for all transac�on in cash above Rs. 3 lakhs, demone�sa�on in November 2016 and the

subsequent banning of all cash transac�ons above Rs. 2 lakhs with effect from 1�� April 2017. The ini�al

uncertain�es of the implementa�on of the GST regime also had a less than salutary impact of the business.

The business showed an impressive turnaround in the second half of the year. This came close on the heels of the

changes in the GST rates on watches from 28% to 18%, consequent to which there was a reduc�on in the prices of

watches. This fuelled demand in an already robust fes�ve and wedding season. The fact that the uptrend of

demand con�nued even a�er the season period is a tes�mony to the fundamental strategic changes to the

business model that have been brought over the past 2 years.

The Company's Swiss subsidiary, Pylania SA in Switzerland reports financial performance as per the expected

levels and its financial performance is con�nuously improving for last 5 years, made possible by calibrated efforts

for revenue enhancement and curtailing overheads. The recently implemented “Swiss Made” regula�ons and

guidelines in Switzerland is also providing new opportuni�es for the watch component business of the Company

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KDDL Limited

through Pylania.

During the year, the 100% subsidiary company, Satva Jewellery and Design Limited (SJDL) merger with the parent

company is in progress and the merger of this company will provide support for greater efficiency in opera�ons

and be�er u�liza�on of resources and assets of SJDL.

DEPOSITS

The details of deposits covered under Chapter V of the Companies Act, 2013 (the act) is given hereunder:

1. Deposits Accepted/ renewed during the year : Rs 4,07,03,000

2. Deposits outstanding at the end of the year : Rs. 11,29,44,000

3. Deposits remained unpaid or unclaimed as at the end of the year : Nil

4. Whether there has been any default in repayment of deposits

or payment of interest thereon during the year and if so, number : NIL

of such cases and the total amount involved

5. The details of deposits which are not in compliance : NIL

with the requirements of Chapter

CHANGES IN SHARE CAPITAL

stDuring the Financial Year ended on 31 March, 2018, the paid up equity share capital of the Company has

increased from Rs. 10,83,95,860 to Rs. 10,95,27,920 pursuant to the issue and allotment of 1,13,206 equity

shares at a price of Rs 265/- per share (including a premium of Rs. 255/- per share) by way of preferen�al

allotment to promoters, by way of conversion of Equity Share warrants into Equity post subscrip�on of full

amount as authorized by the shareholders by way of Special Resolu�on passed at Extra Ordinary General Mee�ng thheld on 8 November 2016.

Further, the Company has neither issued any shares with differen�al vo�ng rights nor any Sweat equity shares.

SUBSIDIARY COMPANY

During the period under review, Cadrafin Sari, an associate company was incorporated in Switzerland in which

Kamla Interna�onal Holding SA, a wholly owned subsidiary company holds 22% ownership. A separate statement

containing salient features of the financial statements of Company’s subsidiaries in prescribed format AOC-I is

annexed as Annexure 1 to this report.

LISTING OF SHARES

The equity shares of the Company are listed at Na�onal Stock Exchange of India (NSE) and Bombay Stock

Exchange (BSE). The Company has paid the Annual Lis�ng Fees to NSE and BSE for the financial year 2018-19.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated financial statements have been prepared by the Company's Management in accordance with the

requirements of Accoun�ng Standard 21 issued by the Ins�tute of Chartered Accountants of India (ICAI) and as

per the provisions of the Companies Act, 2013 (the act).

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KDDL Limited

As per the provisions of Sec�on 136 of the act, the Company has placed separate audited accounts of its

subsidiaries on its website www.kddl.com and a copy of the same will be provided to the shareholders at their

requests.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return, in Form MGT -9 for the Financial Year 2017-18 is enclosed with this report as

Annexure 2.

NUMBER OF BOARD & COMMITTEE MEETINGS

The details of board and commi�ee mee�ngs held during the financial ended 31�� March, 2018 are set out in the

Corporate Governance Report which forms a part of this report. The intervening gap between the mee�ngs was

within the period prescribed under the Act, Secretarial Standard-I and the Lis�ng Regula�ons.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Sec�on 134 (3) (c) read with Sec�on 134(5) of the act and the Securi�es

Exchange Board of India (Lis�ng Obliga�ons and Disclosure Requirements) Regula�ons, 2015 (Lis�ng Obliga�ons)

the Board confirm and report that:-

(a) in the prepara�on of the annual accounts, the applicable accoun�ng standards had been followed along

with proper explana�on rela�ng to material departures;

(b) the directors had selected such accoun�ng policies and applied them consistently and made judgments

and es�mates that are reasonable and prudent so as to give a true and fair view of the state of affairs of

the company as at 31�� March, 2018 and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accoun�ng records in

accordance with the provisions of the Companies Act,2013 for safeguarding the assets of the company

and for preven�ng and detec�ng fraud and other irregulari�es;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by the company and that such

internal financial controls are adequate and were opera�ng effec�vely.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws

and that such systems were adequate and opera�ng effec�vely.

NOMINATION & REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a framework in rela�on to remunera�on of Directors,

Key Managerial Personnel and Senior Management Personnel of the Company. This policy also lays down criteria

for selec�on and appointment of Board Members. The detail of this policy is explained in the Report on Corporate

Governance which forms part of this report.

APPOINTMENT OF INDEPENDENT AUDITOR

M/s BSR & Co. LLP, Chartered Accountants, (Registra�on No.101248W/W-100022) were appointed as Statutory

Auditors of the Company at the 37�� Annual General Mee�ng (AGM) held on 11�� August, 2017 for a term of two

10

KDDL Limited

years to hold office from the conclusion of the 37�� AGM �ll the conclusion the 39�� AGM. The requirement of

placing the ma�er rela�ng to the ra�fica�on of above appointment at every AGM has been omi�ed by the

Companies (Amendment) Act, 2017 w.e.f. 7�� May, 2018.

Informa�on referred in Auditors’ Report are self-explanatory and don’t call for any further comments.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Sec�on 204 of the act and rules made there under, the Company appointed M/s A.

Arora & Co., a firm of Company Secretaries (C.P. No 993) to undertake the Secretarial Audit of the Company. The

Secretarial Audit Report in prescribed format MR.-3 given by aforesaid Secretarial Auditors is annexed to this

Board Report as Annexure 3 and forms an integral part. The report doesn’t contain any reserva�on, qualifica�on

or adverse mark.

PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS UNDER SECTION 186

The details of Loans, Guarantees and Securi�es, and Investments covered under Sec�on 186 of the act are given

in the financial statement of the company during the period under review.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The par�culars of contracts or arrangements with related par�es referred to in Sec�on 188(1) of the act for the

Financial Year 2017-18 in the prescribed Form AOC 2 has been enclosed with the report as Annexure 4.

BOARD’S COMMITTEES

The Board of Directors of the Company cons�tuted the following Commi�ees :

a) Audit Commi�ee

b) Nomina�on & Remunera�on Commi�ee

c) Corporate Social Responsibility (CSR) Commi�ee

d) Stakeholders Rela�onship Commi�ee

The Commi�ees composi�on, charters and mee�ng held during the year and a�endance thereat, are given in the

Report of Corporate Governance forming part of this Annual Report.

AMOUNTS TRANSFERRED TO RESERVES

The Board of Directors of the Company has decided to transfer Rs. 40 million to its General Reserves.

DIVIDEND

Your Directors have recommended a dividend of 25% i.e. Rs. 2.5 per equity share of face value of Rs. 10 each. The

dividend shall be paid a�er the approval of the shareholders at the ensuing Annual General Mee�ng.

The total financial outgo of the dividend to be paid to shareholders will be Rs. 33.01 million (inclusive of Corporate

Dividend Tax).

The dividend payout for the year under review has been formulated in accordance with the Company's policy to

11

KDDL Limited

pay sustainable dividend linked to long term growth objec�ves of the Company.

TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of Sec�on 125 of the act, the company has duly transferred the Unclaimed Dividend up to the financial

years 2007-08 to the Investor Educa�on and Protec�on Fund established by the Central Government . As no

dividend was declared during the financial year 2008-09 and 2009-10, hence no amount was required to be

transferred to the said fund during the year.

MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments in the business opera�ons of the Company from the financial st

year ended 31 March, 2018 to the date of signing of the Director's Report.

RISK MANAGEMENT POLICY

The risk management framework defines the risk management approach of the Company and includes periodic

review of such risks and also documenta�on, mi�ga�ng controls and repor�ng mechanism of such risks.

Some of the risks that the Company is exposed to are:

Risks of Specific Nature

The Company as a part of normal business monitoring review and development plans, iden�fies the specific risks

for each business segment and develops necessary ac�on plan to minimise the impact of same on business

performance. Based on the present opera�ons and areas of interest for the company, following specific nature

risks are iden�fied:

· Risks due to decline in overall demand for watches and over dependence on watch segment;

· Risks pertaining to over dependence on few customers;

· Foreign Exchange Risks;

· Risk related to availability of Skilled manpower;

· Risks related to compliance and statutory requirements

Risk Strategy

The Company recognizes that risk is an integral and unavoidable component of business and is commi�ed to

managing the risk in a proac�ve and effec�ve manner. The Company believes that the Risk cannot be eliminated

but it can be be�er managed by

· Transferred to another party, who is willing to take risk, say by buying an insurance policy or entering into

a forward contract in case of business involving use of Foreign exchange;

· Reduced, by adop�ng good internal controls;

· Avoided, by not entering into risky businesses;

· Retained, to either avoid the cost of trying to reduce risk or in an�cipa�on of higher profits by taking on

more risk, and;

· Shared, by following a middle path between retaining and transferring risk.

12

KDDL Limited

Risk Management Framework

The Company adopts systema�c approach to mi�gate risks associated with accomplishment of objec�ves,

opera�ons, revenues and compliance with the regula�ons. The Company believes that this would ensure

mi�ga�ng steps proac�vely and help to achieve the risk management effec�vely.

The Company has cons�tuted a Risk Management Commi�ee of Chief Execu�ve Officer, Chief Opera�ng Officer,

Chief Financial Officer, Chief Marke�ng Officer and Business Heads as its regular members and other senior

func�onal heads on invita�on basis. The Commi�ee is commi�ed to review periodically the various risks

associated with the Company and report the same to the Board.

Focus of the Company is on the three key elements, viz., Risk Assessment / Iden�fica�on, Risk Management and

Risk Monitoring.

· Poten�al Risks are iden�fied and analyzed, considering likelihood and its impact, as a basis for

determining how they should be managed.

· Risk Assessment consists of a detailed study of threats and vulnerability and resultant exposure to

various risks. Based on the assessment and iden�fica�on of the risks, the commi�ee decided the

proac�ve steps for managing and monitoring these risks.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

The Company is commi�ed to discharge its social responsibility as a good corporate ci�zen. As part of its social

responsibility, the Company has contributed to KDDL-Ethos founda�on and the projects are undertaken by the

trust formed for this purpose. These projects have been undertaken in compliance with the provision of the

Sec�on 135 of the act read with Schedule VII and rules made there under and in accordance with Company's CSR

Policy. The Annual Report on CSR ac�vi�es required under the Companies (Corporate Social Responsibility Policy)

Rules, 2014 is set out as Annexure 5 forming part of this report.

MECHANISM FOR EVALUATION OF BOARD

Pursuant to the provisions of the Companies Act, 2013 and the Lis�ng Regula�ons, a structured procedure was

adopted a�er taking into considera�on the various aspects of the Board's func�oning, composi�on of the Board

and its various Commi�ees, execu�on and performance of specific du�es, obliga�ons and governance.

The performance evalua�on of the Board, Commi�ees there of and Independent Directors was completed on

�me. The performance evalua�on of the Board as a whole, Chairman and the Non-Independent Directors was

carried out by the Independent Directors at their mee�ng.

DIRECTORS

There was no change in the composi�on of Board of Directors during the year. Mr. Sanjeev Kumar Masown,

Whole �me Director who re�res by rota�on at ensuing Annual General Mee�ng of the Company and being

eligible, offers himself for re-appointment.

MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no significant and material orders passed by the Regulators and Courts that would impact the going

concern status of the Company and its future opera�ons.

13

KDDL Limited

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE

FINANCIAL STATEMENTS

A strong internal control culture is an important focus and thrust area in the Company. The Company has

comprehensive internal systems, controls and policies for all the major processes to ensure the reliability of

financial repor�ng, �mely feedback on achievement of opera�onal and strategic goals, compliance with policies,

procedures, laws, and regula�ons, safeguarding of assets and economical and efficient use of resources.

The formalized systems of control facilitate effec�ve compliance as per the Lis�ng Regula�ons. The company also

has well documented Standard Opera�ng Procedures (SOPs) for various processes which are periodically

reviewed for changes warranted due to business needs.

The Internal Auditors of the company con�nuously monitor the efficacy of internal controls/ compliance with

SOPs with the objec�ve of providing to the Audit Commi�ee and the Board of Directors, an independent,

objec�ve and reasonable assurance on the adequacy and effec�veness of the organiza�on's risk management,

control and governance processes.

The scope and authority of the Internal Audit ac�vity are well defined in the Internal Audit scope and guidelines,

approved by the Audit Commi�ee. Internal Auditors develop a risk based annual audit plan with inputs from

major stake holders, and the major focus areas as per previous audit reports.

All significant audit observa�ons are reviewed periodically and follow-up ac�ons thereon are reported to the

Audit Commi�ee. The Audit Commi�ee also meet the Company's Statutory Auditors and Internal Auditors to

ascertain their views on the financial statements, including the financial repor�ng system, compliance to

accoun�ng policies and procedures, the adequacy and effec�veness of the internal controls and systems

followed by the Company.

The top and senior management of the Company also assesses opportuni�es for improvement in business

processes, systems and controls, provides recommenda�ons, designed to add value to the organiza�on and

follows up on the implementa�on of correc�ve ac�ons and improvements in business processes.

The senior management of the Company meets periodically to assess the performance of the each business

segment and key func�ons of the Company and areas for improvement of performance / controls are iden�fied

and reviewed on con�nuous basis.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS

The disclosure pertaining to Employee Stock Op�on Plan of the Company is enclosed as a Annexure-6

DECLARATION BY INDEPENDENT DIRECTOR

All Independent Directors of the Company have given declara�ons that they meet the criteria of independence as

laid down under Sec�on 149(6) of the act and the regula�ons 16 (1) (b) of the Lis�ng Regula�ons.

CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE EARNINGS AND

OUTGO

The informa�on required under sec�on 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts)

Rules, 2014 rela�ng to “Conserva�on of Energy, Technology Absorp�on and Foreign Exchange Earnings and

Outgo” is given in the Annexure - 7 forming an integral part of this Report.

14

KDDL Limited

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of business of the Company

MANAGERIAL REMUNERATION

Sta�s�cal Disclosures pursuant to Rule 5 of Companies (Appointment and Remunera�on of Managerial

Personnel) Rules, 2014, is enclosed with this report as Annexure --8.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Board of Directors of the Company has adopted Whistle Blower Policy effec�ve from 2ⁿ� February, 2015. The

Whistle Blower Policy aims for conduc�ng the affairs in a fair and transparent manner by adop�ng highest

standards of professionalism, honesty, integrity and ethical behavior. All permanent employees of the Company

are covered under the Whistle Blower Policy.

A mechanism has been established for employees to report concerns about unethical behavior, actual or

suspected fraud or viola�on of Code of Conduct and Ethics. It also provides for adequate safeguards against the

vic�miza�on of employees who avail of the mechanism and allows direct access to the Chairperson of the Audit

Commi�ee in excep�onal cases. The Whistle Blower Policy of the Company is available at the link

h�p://www.kddl.com/pdf/2015/KDDL_Whistle_Blower_Policy.pdf.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,

PROHIBITION & REDRESSAL) ACT, 2013

The Company had about 271 women employees, both permanent as well as contractual in various fields within

the factory premises and offices. The Company has in place an policy in line with the requirement of the Sexual

Harassment of Women at Workplace (Preven�on, Prohibi�on & Redressal) Act, 2013. There was no complaint

received from any employee during the financial year 2017-18 and hence no complaint is outstanding as on 31��

March, 2018.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed Report on Management Discussion and Analysis, pursuant to Lis�ng Regula�ons is annexed to this

report as Annexure - 9.

CORPORATE GOVERNANCE

The Company has complied with all the requirements of Corporate Governance as s�pulated in Lis�ng st

Regula�ons during the year ended on 31 March, 2018 as per Report on Corporate Governance annexed as stAnnexure -10 and a Cer�ficate from the Prac�cing Company Secretary to this effect for the year ended on 31

March, 2018 is also enclosed with this report.

CASH FLOW ANALYSIS

In conformity with the provisions of Clause 34(2) of Lis�ng Regula�ons, the Cash Flow Statement for the stfinancial year ended on 31 March, 2018 forms an integral part of the Financial Statements.

PERSONNEL

Your Directors place on record their apprecia�on for the significant contribu�on made by all the employees, who

through their competence, hard work, solidarity and co-opera�on, have enabled the Company to perform be�er.

KDDL Limited

15

KDDL Limited

TRADE RELATIONS

The Board wishes to place on record its apprecia�on for the support and co-opera�on that the Company received

from its suppliers, distributors, retailers and other associates. The Company has always looked upon them as

partners in its progress and has happily shared with them rewards of growth. It will be Company's endeavor to

build and nurture strong links based on mutuality, respect and co-opera�on with each other and consistent with

customer interest.

ACKNOWLEDGMENTS

Your Directors take this opportunity to thank all the investors, clients, vendors, banks, regulatory and government

authori�es, for their con�nued support.

For and on behalf of the Board of Directors

Yashovardhan Saboo Chairman & Managing Director

DIN : 00012158

Date : 14 May, 2018Place : Gurugram, Haryana

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Name of AssociatesKamla Tesio Dials

Limited

1. Latest audited Balance Sheet Date31/3/2017

2. Shares of Associate/ Joint Ventures held by the company

on the year end

No.3 Lakhs

Amount of Investment in Associates/ Joint VenturesRs. 30 Lakhs

Extent of Holdings %30%

3. Descrip�on of how there is significant influenceAssociate

4. Reason why the associate/ joint venture is not

consolidatedN.A.

5. Networth a�ributable to Shareholding as per latest

audited Balance SheetRs. 27.72 Lakhs

6. Profit/ Loss for the YearRs. 0.96 Lakhs

i. Considered in Consolida�onRs. 0.29 Lakhs

ii. Not Considered in Consolida�on

Rs. 0.68 Lakhs

Part "B": Associates and Joint VenturesStatement pursuant to Sec�on 129(3) of the Companies At, 2013 related to Associate Companies And Joint Ventures

KDDL Limited

18

For and on behalf of the Board of Directors of KDDL Limited

Yashovardhan Saboo Sanjeev Masown Chairman Chief Financial Officer and Managing Director and Whole �me Director DIN: 00012158 DIN: 03542390

Raman Sood Company Secretary Membership no. F3722

Place : Gurugram, Haryana Date : 14 May 2018

I. REGISTRATION AND OTHER DETAILS:

i) CIN�:- L33302HP1981PLC008123th

ii) Registra�on Date :- 8 January, 1981

iii) Name of the Company :- KDDL Limited

iv) Category / Sub-Category of the Company : - Public Company(Limited by Shares)

v) Address of the Registered office and contact details :-

Plot no. 3, Sector III, Parwanoo 173 220 (Himachal Pradesh) Telephone no.: 01792-232462/233402 Fax no.: 01792-232619

vi) Whether listed company :- Yes

vii) Name, Address and Contact details of Registrar and Transfer Agent, if any:- Karvy Computershare Private Limited, Karvy Selenium Tower B, Plot 31-32, Financial District,

Nanakramguda, Gachibowli, Hyderabad – 500 032 Phone No: 040-67161516/1518, Fax: 040-23420818 Website: www.karvy.com

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business ac�vi�es contribu�ng 10% or more of the total turnover of the company shall be stated:-

Form No. MGT-9EXTRACT OF ANNUAL RETURN

as on the financial year ended on 31�� March, 2018[Pursuant to sec�on 92(3) and rule 12(1) of theof the Companies Act, 2013

Companies (Management and Administra�on) Rules, 2014]

19

KDDL Limited

1 Watch Dials & watch hands 26521 73.602. Components & Press tools 26101 & 225933 23.00

Sl. No.

Name and address of the Company

CIN/GLN Holding/Subsidiary/Associate

% of shares held

Applicablesec�on

1 Mahen Distribu�on Limited U93000CH2009PLC031625 Wholly Owned Subsidiary Company

100.00 2(87)(ii)

2 Ethos Limited U52300HP2007PLC030800 Subsidiary Company 75.86 2(87)(ii)

3 Pylania SA -- Subsidiary Company 85.00 2(87)(ii)

4 Kamla Interna�onal Holding SA -- Wholly Owned Subsidiary

100.00 2(87)(ii)

5 Satva Jewellery and Design Limited U36911CH2004PLC027767 Wholly owned Subsidiary

100.00 (2)(6)

6 Kamla Tesio Dials Limited U33309CH1996PLC018732 Associate Company 30.00 (2)(6)

Annexure - '2'

20

KDDL Limited

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)i) Category-wise Share Holding

CATEGORY CODE

CATEGORY OF SHAREHOLDER

NO. OF SHARES HELD AT THE BEGINNING OF THE YEAR 31/03/2017

NO. OF SHARES HELD AT THE END OF THE YEAR 01/04/2018

% CHANGE DURING THE YEAR

DEMAT

PHYSICAL

TOTAL

% OF TOTAL SHARES

DEMAT

PHYSICAL

TOTAL

% OF TOTAL SHARES

(I)

(II)

(III)

(IV)

(V)

(VI)

(VII)

(VIII)

(IX)

(X)

(XI)

(A)

PROMOTER AND PROMOTER GROUP

(1)

INDIAN

(a)

Individual /HUF

4784781

0

4784781

44.14

4882893

0

4882893

44.58

0.44

(b)

Central Government/State Government(s)

0

0

0

0.00

0

0

0

0.00

0.00

(c)

Bodies Corporate

16310

60000

76310

0.70

31404

0

31404

0.29

-0.42

(d)

Financial Ins�tu�ons / Banks

0

0

0

0.00

0

0

0

0.00

0.00

(e)

Others

0

0

0

0.00

0

0

0

0.00

0.00

Sub-Total A(1) :

4801091

60000

4861091

44.85

4914297

0

4914297

44.87

0.02

(2)

FOREIGN

(a) Individuals (NRIs/Foreign

Individuals)

0

0

0

0.00

0

0

0

0.00

0.00

(b)

Bodies Corporate

0

0

0

0.00

60000

0

60000

0.55

0.55

(c)

Ins�tu�ons

0

0

0

0.00

0

0

0

0.00

0.00

(d)

Qualified Foreign Investor

0

0

0

0.00

0

0

0

0.00

0.00

(e) Others 0 0 0 0.00 0 0 0 0.00 0.00

Sub-Total A(2) : 0 0 0 0.00 60000 0 60000 0.55 0.55

Total A=A(1)+A(2) 4801091 60000 4861091 44.85 4974297 0 4974297 45.42 0.57

(B) PUBLIC SHAREHOLDING

(1) INSTITUTIONS

(a) Mutual Funds /UTI 94780 2900 97680 0.90 74580 2900 77480 0.71 -0.19 (b) Financial Ins�tu�ons /Banks 1174 50 1224 0.01 0 50 50 0.00 -0.01

(c)

Central Government / State Government(s) 0 0 0 0.00 0 0 0 0.00 0.00

(d) Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00 (e)

Insurance Companies

0

0

0

0.00

0

0

0

0.00

0.00

(f)

Foreign Ins�tu�onal Investors

1510932

0

1510932

13.94

1787305

0

1787305

16.32

2.38

(g)

Foreign Venture Capital Investors

0

0

0

0.00

0

0

0

0.00

0.00

(h)


0

0

0

0.00

0

0

0

0.00

0.00 (i)

Others

0

0

0

0.00

0

0

0

0.00

0.00

Sub-Total B(1) :

1606886

2950

1609836

14.85

1861885

2950

1864835

17.03

2.17

(2)

NON-INSTITUTIONS

(a)

Bodies Corporate

1402371

101771

1504142

13.88

1289688

101538

1391226

12.70

-1.17

(b)

Individuals

(i) Individuals holding nominal share capital upto Rs.1 lakh

1371004

306383

1677387

15.47

1304879

285790

1590669

14.52

-0.95

(ii) Individuals holding nominal share capital in excess of Rs.1 lakh 943765 0 943765 8.71 962604 0 962604 8.79 0.08

(c)

Others

CLEARING MEMBERS 47613

0

47613

0.44

475

0

475

0.00

-0.43

FOREIGN BODIES 48000

0

48000

0.44

40000

0

40000

0.37

-0.08

NBFC

1000

0

1000

0.01

2389

0 2389

0.02

0.01

NON RESIDENT INDIANS 105914 50 105964 0.98 86770 50 86820 0.79 -0.18

NRI NON-REPATRIATION 40788 0 40788 0.38 39477 0 39477 0.36 -0.02

(d)


0

0

0

0.00

0

0

0

0.00

0.00

Sub-Total B(2) :

3960455

408204

4368659

40.30

3726282

387378

4113660

37.56

-2.74

Total B=B(1)+B(2) : 5567341 411154 5978495 55.15 5588167 390328 5978495 54.58 -0.57

Total (A+B) : 10368432 471154 10839586 100.00 10562464 390328 10952792 100.00 0.00

(C) Shares held by custodians, against which

Depository Receipts have been issued

(1)

Promoter and Promoter Group

(2)

Public

0

0

0

0.00

0

0

0

0.00

0.00

GRAND TOTAL (A+B+C) :

10368432

471154

10839586

100.00

10562464

390328

10952792

100.00

ii) Shareholding of Promoters

Sl. No.

Shareholder's Name Shareholding at the beginning of

the year

Shareholding at the end of the year %age

change in shareholding during the year

No. of shares

% of total shares of the Company

% of shares pledged/encumbered to total shares

No. of shares

% of total shares of the Company

% of shares pledged/encumbered to total shares

1

R.K. Saboo

1862107

17.18

1862107

17.00

-0.18

2

Yashovardhan Saboo

1051501

9.70

1074142

9.81

+0.11

3

Yashovardhan Saboo

333000

3.07

3.30

333000

3.04

3.04

-0.03

4

Usha Devi Saboo

436180

4.03

436180

3.98

-0.05

5

Anuradha Saboo

308050

2.84

360880

3.29

+0.45

6 Pranav Shankar Saboo 170120 1.57 177667 1.62 +0.05

7 Satvika Saboo 130121 1.20 130121 1.19 -0.01

8 Yashovardhan Saboo 91371 0.85 91371 0.83 -0.02

9 Rajendra Kumar Saboo 88432 0.82 88432 0.81 -0.01 10 Anuradha Saboo 75977 0.70 75977 0.69 -0.01 11 Rajendra Kumar Saboo 69820 0.64 69820 0.64 0 12

Pranav Shankar Saboo

44784

0.42

44784

0.41

-0.01

13 Asha Devi Saboo 30925 0.28 30925 0.28 0

KDDL Limited

21

14

Rajendra Kumar Saboo

30800

0.28

30800

0.28

0

15

Usha Devi Saboo

15000

0.14

15000

0.14

0

16

Yashovardhan Saboo

22908

0.22

38002

0.35

+0.13

17

Yashovardhan Saboo

10750

0.10

10750

0.10

0 18

Rajendra Kumar Saboo

7301

0.06

7301

0.06

0

19

Satvika Saboo

5634

0.05

5634

0.05

0

20

Vardhan Proper�es & Investment Limited

9001

0.08

9001

0.08

0

21

Dream Digital Technology Limited

7309

0.07

22403

0.20

+0.13

22

Swades Capital LLC

60000

0.55

60000

0.55

0

Total 4861091 44.85 3.30 4974297 45.4

i) Change in Promoters’ Shareholding (please specify, if there is no change)

Sl.No. Shareholding at the beginning of the year

Cumula�ve shareholding during the year

% of total shares of the company

No. of shares % of total shares of the company

At the beginning of the year

1.

Yashovardhan Saboo

1486622

13.71

2.

Anuradha Saboo

384027

3.54

3.


214904

1.98

4

Yashovardhan Saboo HUF

22908

0.21

5

Dream Digital Technology P Ltd

7309

0.07

Date wise Increase/Decrease in Promoter shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc.)

Dated 15-03-2018

Conversion of Zero Coupon Conver�ble Warrants( ZCCW) into equity shares as per the terms of issue.

Name of Promoter

No. of Zero Coupon Conver�ble Warrants converted into shares

Shareholding before conversion

Shareholding a�er Conversion

% of Capital

1.

Yashovardhan Saboo

22641

1486622

1509263

13.78

2.

Anuradha Saboo

52830

384027

436857

3.99

3.


7547

214904

222451

2.03

4

Yashovardhan Saboo HU F

15094

22908

38002

0.35

5

Dream Digital Technology P Ltd

15094

7309

22403

0.20

At the end of the year

No. of shares

% of Capital

1.

Yashovardhan Saboo

1509263

13.78

2.

Anuradha Saboo

436857

3.99

3.


222451

2.03

4 Yashovardhan Saboo HUF 38002 0.35

5 Dream Digital Technology P Ltd 22403 0.20

KDDL Limited

22

iv) Shareholding Pa�ern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Shareholding at the begginning of the Year

Cumula�ve Shareholding during the Year

Slno

Name of the Share Holder

No of Shares


Date

Increase/Decrease in share holding

Reason

No of Shares


1

SAIF INDIA V FII HOLDINGS LIMITED

1008400

9.30

31/03/2017

1008400

9.30

01/04/2018

1008400

9.21

2

SAIF PARTNERS INDIA V LIMITED

754716

6.96

31/03/2017

754716

6.96

01/04/2018

754716

6.89

3

KITARA INDIA MICRO CAP GROWTH FUND 374680

3.46

31/03/2017

374680

3.46

01/04/2018

374680

3.42

4

PARAM CAPITAL RESEARCH PRIVATE LIMITED 211536

1.95

31/03/2017

211536

1.95

01/04/2018

211536

1.93

5

PARTNER REINSURANCE EUROPE SE-ALCHEMY CAPITAL

0

0.00

31/03/2017

0

0.00

22/12/2017

18795

Transfer

18795

0.17

29/12/2017

9075

Transfer

27870

0.26

05/01/2018

16651

Transfer

44521

0.41

12/01/2018

18918

Transfer

63439

0.59

19/01/2018

4206

Transfer

67645

0.62

26/01/2018

14146

Transfer

81791

0.75

02/02/2018

22928

Transfer

104719

0.97

09/02/2018

1347

Transfer

106066

0.98

23/03/2018

3072

Transfer

109138

1.01

30/03/2018

10338

Transfer

119476

1.10

01/04/2018

119476

1.09

6

SBI PIPE FUND -

1

94780

0.87

31/03/2017

94780

0.87

01/12/2017

-10200

Transfer

84580

0.78

09/02/2018

-10000

Transfer

74580

0.69

01/04/2018

74580

0.68

7 ANANTROOP FINANCIAL ADVISORY SERVICES

PRIVATE LIMI

84000

0.77 31/03/2017

84000

0.77

01/04/2018

84000

0.77

8

UNIVERSAL GOLDEN FUND

82817

0.76 31/03/2017

82817

0.76

07/04/2017

56338

Transfer

139155

1.28 26/05/2017

18977

Transfer

158132

1.46

14/07/2017

11988

Transfer

170120

1.57

01/04/2018

170120

1.55

9

MAVEN INDIA FUND

0

0.00 31/03/2017

0

0.00

17/11/2017 50000 Transfer 50000 0.46 16/03/2018 11007 Transfer 61007 0.56 01/04/2018 61007 0.56

10 R C TRITEC AG 60000 0.55 31/03/2017 60000 0.55

01/04/2018 60000 0.55

KDDL Limited

23

v) Shareholding of Directors and Key Managerial Personnel:

Sl.No. For each of the Directors and Key Managerial Personnel

Shareholding Cumula�ve shareholding during the year



At the beginning of the year

A

Mr. Yashovardhan Saboo (Individually and through HUF)

1509530

13.93

1547265

13.93

B

Mr. Jagesh Khaitan

466

0

466

0

C

Mr. Anil Khanna

4283

0.04

4283

0.04

D

Mr. Sanjeev Kumar Masown

2000

0.02

2000

0.02

Date wise Increase/Decrease in Pr omoter shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc.)

-As given above-

At the end of the year A

Mr. Yashovardhan Saboo (Individually and through HUF)

1547265

14.13

1547265

14.13

B

Mr. Anil Khanna

4283

0.04

4283

0.04

C

Mr.Jagesh Khaitan

466

0

466

0

D


2000

0.02

2000

0.02

V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment

Par�culars Secured Loans Deposits Total Indebtedness

Indebtedness as at the beginning of the

Financial Year 1.4.2017

1 Principal Amount 273,119,532 124,402,000 397,521,532

2 Interest Due but not paid 3 Interest accrued but not due 13,220,225 13,220,225

Total of (1+2+3) 273,119,532 137,622,225 410,741,757 Change in indebtedness during the financial year

Addi�on

389,021,354

54,403,000

443,424,354

Reduc�on

140,219,552

40,941,000

181,160,552

Net Change

248,801,802

13,462,000

262,263,802

Indebtedness as at the end

of the

Financial Year 31.3.2018

1

Principal Amount

521,921,334

137,864,000

659,785,334

2

Interest Due but not paid

-

-

-

3

Interest accrued but not due

2,045,071

-

15,412,787

17,457,858

Total of (1+2+3) 523,966,405 153,276,787 677,243,192

KDDL Limited

24

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remunera�on to Managing Director, Whole-�me Directors and/or Manager:

Sl. No.

Par�culars of the Remunera�on Name of MD/WTD/Manager Mr. Yashovardhan Saboo


Total Amount in (₹)

1. Gross Salary (a) Salary as per provisions contained in

sec�on 17(1) of the Income-tax Act, 1961

11918669 6370359 18289028

(b) Value of perquisites u/s (17(2) of Income Tax Act, 1961

482205 54345 536550

(c) Profits in lieu of salary under sec�on 17(3) Income-tax of Income Tax Act, 1961

2 Stock Op�on 3 Sweat Equity 4

Commission

(a)

as % of profit

(b)

Others, specify

5

Others, please specify

Total (A)

12400874

6424704

18825578

Overall Ceilings

As per Act

As per Act

As per Act

B. Remunera�on to Other Directors:

Sl. No.

Par�culars of the Remunera�on

Name of Directors

Total Amount

Mr. J.V.Saboo

Mr. Sanjiv Sachar

Mr. Anil Khanna

Mr. Jagesh Khaitan

Mrs. Ranjana Agarwal

Mr. Praveen Gupta

1 Independent Directors

Fees for a�ending board/commi�ee mee�ngs

85000 125000

140000

95000

80000

525000

Commission


Total (1)

--

85000

125000

140000

95000

80000

525000

2

Other Non Execu�ve Directors

Fees for a�ending board/commi�ee mee�ngs

15000

15000

Commission

-


-

Total (2)

15000

Total (B) = 1 + 2

15000

40,000

150,000

135,000

110,000

105,000

540,000

Total Managerial Remunera�on

15000

40,000

150,000

135,000

110,000

105,000

540,000

Overall Ceilings as per Act As per ActAs per Act As per Act As per Act As per Act As per Act As per Act

KDDL Limited

25

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

Sl. No. Par�culars of the Remunera�on Key Managerial Personnel

Company Secretary WTD-CUM-CFO Total

1 Gross Salary

(a) Salary as per provisions contained in sec�on 17(1) of the Income-tax Act, 1961

1738220

6370359

8108579

(b) Value of perquisites u/s 17(2) Income Tax Act, 1961

nil

54345

54345

(c) Profits in lieu of salary under sec�on17(3) Income-tax Act, 1961

Nil

Nil

Nil

2

Stock Op�on

Nil

Nil

Nil

3

Sweat Equity

Nil

Nil

Nil

4

Commission

Nil

Nil

Nil

a) as % of profit

Nil

Nil

Nil

b) Others, specify

Nil

Nil

Nil

5


Nil

Nil

Nil

Total 1738220 6424704 8162924

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: (NOT APPLICABLE)

Type Sec�on of the Companies Act

Brief Descrip�on

Details of penalty/punishment/compounding fees imposed

Authority {RD/NCLT/Court}

Appeal made, if any (give details

A. COMPANY Penalty --NIL-- Punishment Compounding

B. DIRECTORS

Penalty --nil-- Punishment Compounding

C.

OTHER OFFICERS IN DEFAULT

Penalty

--nil--

Punishment

Compounding

KDDL Limited

26

Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2018

[Pursuant to Sec�on 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remunera�on of Managerial Personnel) Rules, 2014]

To,The Members,KDDLLimitedPlot No. III, Sector 3Parwanoo, Himachal Pradesh

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate prac�ces by KDDL LIMITED (hereina�er called “the Company”). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evalua�ng the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verifica�on of the KDDL LIMITED'S books, papers, minute books, forms and returns filed and other records maintained by the company and also the informa�on provided by the Company, its officers, agents and authorized representa�ves during the conduct of secretarial audit, I hereby report that in my opinion, the company has, during the audit period covering the financial year ended on March 31, 2018 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processesand compliance-mechanism in place to the extent, in the manner and subject to the repor�ng made hereina�er.

I have examined the books, papers, minute books, forms and returns filed and other records maintained by KDDL LIMITED (“the Company”) for the financial year ended on March 31, 2018accordingto the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made there under;

(ii) The Securi�es Contracts (Regula�on) Act, 1956 ('SCRA') and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regula�ons and Bye-lawsframed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regula�ons made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

(v) The following Regula�ons and Guidelines prescribed under the Securi�es and Exchange Board of India Act, 1992 ('SEBI Act'):

a) The Securi�es and Exchange Board of India (Substan�al Acquisi�on of Shares and Takeovers) Regula�ons, 2011 and The Securi�es and Exchange Board of India (Substan�al Acquisi�on of Shares and Takeovers) (Amendment) Regula�ons, 2013.

b) The Securi�es and Exchange Board of India (Prohibi�on of Insider Trading) Regula�ons, 2015;

c) The Securi�es and Exchange Board of India (Delis�ng of Equity Shares) Regula�ons, 2009 and the amendments thereof: Not Applicable, as none of the securi�es of the company were delisted during the audit period.

d) The Securi�es and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regula�ons, 2009.

Annexure - ‘3'

KDDL Limited

27

e) The Securi�es and Exchange Board of India (Share Based Employee Benefits) Regula�ons 2014- Not Applicable as the company has not provided any share based benefits to the employees during the year.

f) The Securi�es and Exchange Board of India (Issue and Lis�ng of Debt Securi�es) Regula�ons, 2008and Chapter V of Securi�es and Exchange Board of India (Lis�ng Obliga�ons and Disclosure Requirements) Regula�ons, 2015- Not applicable as the company has not issued any debt securi�es during the financial year under review.

g) The Securi�es and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regula�ons, 1993 regarding the Companies Act and dealing with client- Not applicable as the company is not registered as Registrar to an Issue and Share Transfer Agent during the financial year under review.

h) The Securi�es and Exchange Board of India (Buyback of Securi�es) Regula�ons, 1998- Not applicable as the company has not bought back any of its securi�es during the financial year under review.

(vi) The major provisions and requirements have also been complied with as prescribed under all applicable Labour laws viz. The Factories Act, 1948, The Payment of Wages Act, 1936, The Payment of Bonus Act, 1965, Industrial Dispute Act, 1947, Employee State Insurance Act, 1948, The Employee's Provident Fund and Miscellaneous Provisions Act, 1952, The Payment of Gratuity Act, 1972, The Industrial Employment (Standing Order) Act, 1946.

(vii) Hazardous Waste (Management and Handling) Rules, 1989 and the Amendments Rules, 2003.

(viii) The Air(Preven�on and Control of Pollu�on) Act, 1981

(ix) The Water (Preven�on and Control of Pollu�on) Act, 1974

I have also examined compliance with the applicable clauses o�he following:

a) Secretarial Standards issued by The Ins�tute of Company Secretaries of India.

b) The SEBI (Lis�ng Obliga�ons & Disclosure Requirements) Regula�ons, 2015.

During the period under review the Company has complied with the provisions of the act, rules, regula�ons, guidelines, standards, etc. men�oned above.

Based on my examina�on and the informa�on received and records maintained, I further report that:

1. The Board of Directors of the Company is duly cons�tuted with proper balance of Execu�ve Directors, Non-Execu�ve Directors and Independent Directors. The changes in the composi�on of the Board of Directors that took place during the year under review were in compliance with the provisions of the Act.

2. Adequate no�ce is given to all directors to schedule the Board Mee�ngs, agenda and detailed notes on agenda were sent well in advance, and a system exists for seeking and obtaining further informa�on and clarifica�ons on the agenda items before the mee�ng and for meaningful par�cipa�on at the mee�ng.

3. All decision is carried through majority while the dissen�ng members' views, if any, are captured and recorded as part of the minutes.

4. The company has proper board processes.

Based on the compliance mechanism established by the company and on the basis of the compliance cer�ficate(s) issued by the Company Secretary/ Officers, I am of an opinion that there are adequate systems and processes in the company commensurate with the size and opera�ons of the company to monitor and ensure

KDDL Limited

28

compliance withapplicable laws, rules, regula�ons and guidelines.

I further report that the company has not filed the requisite returns in Form MGT-14 regarding the Board Resolu�ons passed for approval of financial statements and investments of company's funds.

I further report that during the audit period:

1. Approval of the members was sought in the 37�� Annual General Mee�ng of the company held on 11.08.2017 for:

a. The Ar�cles of Associa�on of the company by way of special resolu�on.

b. Investment of the funds of the company into the share capital (Equity/Preference) of Ethos Limited, a subsidiary company upto a limit of Rs. 30.00 Crores (Rupees Thirty Crores only), including the investments already made during previous financial year, by way of special resolu�on.

c. Borrowing by way of invi�ng and accep�ng unsecured fixed deposits from shareholders of the company, by way of ordinary resolu�on.

2. Approval of the members was sought in an Extra Ordinary General Mee�ng of the company held on 11.08.2017 for:

a. The proposed scheme of Amalgama�on of Satva Jewellery and Designs Limited, a Wholly Owned Subsidiary company with KDDL Limited by way of Special resolu�on.

b. Material related party transac�on with Ethos Limited, Subsidiary Company, for subscribing to its paid up share capital, subject to the maximum value of the investments not to exceed Rs. 20.00 Crores (Rupee Twenty Crores only).

3. The company has allo�ed 1,13,206 equity shares of Rs. 10/- each, at a price of Rs. 265/- per share, to the Promoters/ Promoters Body Corporate, upon conversion of Zero Coupon Conver�ble Warrants held by them.

Apart from the business stated above, there were no instances of:

(i) Redemp�on / buy-back of securi�es.

(ii) Major decisions taken by the Members in pursuance to Sec�on 180 of the Companies Act, 2013.

(iii) Foreign technical collabora�ons.

Place: - Chandigarh For A. Arora & Co.

Date: - 14-05-2018 Ajay K. Arora

Company Secretary FCS No.2191C P No. 993

KDDL Limited

29

This report is to be read with our le�er of even date which is annexed as “Annexure A” and forms an integral part of this report.

Annexure A to Secretarial Audit ReportTo,The Members,KDDLLimitedPlot No. III, Sector 3Parwanoo, Himachal Pradesh

My report of even date is to be read along with this le�er.

1. Maintenance of secretarial records is the responsibility of the management of the company. My responsibility is to express an opinion on these secretarial records, based on my audit.

2. I have followed the audit prac�ces and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of secretarial records. The verifica�on was done on test basis to ensure that the correct facts are reflected in secretarial records. I believe that the processes and prac�ces, I followed, provide a reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records and books of accounts of the company.

4. Wherever required, I have obtained the management representa�on about the compliance of laws, rules and regula�ons and happening of events etc.

5. The compliance of the provisions of corporate and other applicable laws, rules, regula�ons, standards is the responsibility of the management. Our examina�on was limited to the extent of verifica�on of procedures on test basis.

6. The secretarial audit report is neither an assurance as to the future viability of the company nor of the efficacy or effec�veness with which the management has conducted the affairs of the company.

Sd/-

Company Secretaries

Date: - 29-05-2017

Place: - Ludhiana

KDDL Limited

30

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'

Nam

e(s)

of

the

rela

ted

par

ty a

nd

n

atu

re o

f re

la�

on

ship

Nat

ure

of

con

trac

ts/a

rran

gem

ents

/tra

nsa

c�o

ns

Du

ra�

on

of

the

con

trac

ts /

arra

nge

men

ts/t

ran

sac�

on

s

Salie

nt

term

s o

f th

e co

ntr

acts

or

arra

nge

men

ts o

r tr

ansa

c�o

ns

incl

ud

ing

the

valu

e, if

an

y

Jus�

fica

�o

n f

or

ente

rin

g in

to s

uch

co

ntr

acts

or

arra

nge

men

ts o

r tr

ansa

c�o

ns

Dat

e(s)

of

app

rova

l b

y th

e B

oar

d

Am

ou

nt

pai

d a

s ad

van

ces,

if a

ny:

Dat

e o

n w

hic

h

the

spec

ial

reso

lu�

on

was

p

asse

d in

gen

eral

m

ee�

ng

as

req

uir

ed u

nd

er

firs

t p

rovi

so t

o

sec�

on

18

8

Dre

am D

igit

alTe

chno

logi

es P

vt. L

td.

Leas

e A

ggre

men

t

08

.12

.20

17

nil

NA

Inte

r C

orp

ora

te

Dep

osi

t

Acc

ep�

ng

Inte

r C

orp

ora

te D

epo

sit

of

Rs.

1 c

rore

on

ly.

Yash

ova

rdh

an

Sab

oo

Leas

e A

gree

men

t

3 Y

ears

Leas

e o

f p

or�

on

of

Ho

use

No

. 1,

Sect

or

5, C

han

dig

arh

Offi

cial

/ R

esid

en�

al

pu

rpo

se

30

/05

/20

17

Nil

NA

Eth

os

Lim

ited

Sub

Lea

se

Agr

eem

ent

3 Y

ears

O

ffici

al

Nil

NA

Leas

ing

of

par

t o

f p

rem

ises

at

Kam

la

Cen

tre,

SC

O 8

8-8

9, S

ecto

r 8

-C,

Ch

and

igar

h w

.e.f.

1��

Dec

emb

er 2

01

7

Offi

cial

Dre

am D

igit

alTe

chno

logi

es P

vt. L

td.

1 Y

ear

Bo

rro

win

gs1

1/0

8/2

01

7

Leas

ing

of

par

t o

f p

rem

ises

at

2-A

, B

lock

-L, H

auz

Kh

as E

ncl

ave

New

Del

hi

30

/05

/20

17

KDDL Limited

31

Sr.

No

.

1.

3.

4.

2.

No

. N

ame(

s) o

f th

e re

late

d p

arty

an

d

nat

ure

of

rela

�o

nsh

ip

Nat

ure

of

con

trac

ts/a

rran

gem

ents

/tra

nsa

c�o

ns

Du

ra�

on

of

the

con

trac

ts /

arra

nge

men

ts/t

ran

sac�

on

s

Salie

nt

term

s o

f th

e co

ntr

acts

or

arra

nge

men

ts o

r tr

ansa

c�o

ns

incl

ud

ing

the

valu

e, if

an

y

Jus�

fica

�o

n f

or

ente

rin

g in

to s

uch

co

ntr

acts

or

arra

nge

men

ts o

r tr

ansa

c�o

ns

Dat

e(s)

of

app

rova

l b

y th

e B

oar

d

Am

ou

nt

pai

d a

s ad

van

ces,

if a

ny:

Dat

e o

n w

hic

h

the

spec

ial

reso

lu�

on

was

p

asse

d in

gen

eral

m

ee�

ng

as

req

uir

ed u

nd

er

firs

t p

rovi

so t

o

sec�

on

18

8

Eth

os

Ltd

Inve

stm

ent

14

.09

.20

17

Nil

11

.08

.20

17

Eth

os

Ltd

15

.3.2

01

8

Eth

os

Ltd

Co

rpo

rate

G

uar

ante

e

To e

nab

le E

tho

s Lt

d.

to a

vail

bo

rro

win

gs

8.1

2.2

01

7

Nil

Eth

os

Ltd

Co

rpo

rate

G

uar

ante

e

Co

rpo

rate

G

uar

ante

e

7.0

2.2

01

8

NIL

Inve

stm

ent

of

Rs.

7 C

rore

s b

y w

ay o

f su

bsc

rib

ing

4,9

6,4

53

eq

uit

y sh

ares

of

Rs.

10

eac

h o

f E

tho

s Lt

d. a

t Rs.

14

1 e

ach

in

clu

din

g a

pre

miu

m o

f R

s. 1

31

per

sh

are.

Inve

stm

ent

in

sub

sid

iary

co

mp

any

Inve

stm

ent

Inve

stm

ent

of

Rs.

15

Cro

res

by

way

of

sub

scri

bin

g 1

0,8

6,9

56

eq

uit

y sh

ares

of

Rs.

10

eac

h o

f E

tho

s Lt

d. a

t Rs.

13

8 e

ach

in

clu

din

g a

pre

miu

m o

f R

s. 1

28

per

sh

are.

Inve

stm

ent

in

sub

sid

iary

co

mp

any

Nil

07

.02

.20

18

Pro

vid

ing

Co

rpo

rate

Gu

aran

tee

for

the

bo

rro

win

gs to

be

mad

e b

y Et

ho

s Lt

d. f

or

a su

m n

ot

exce

ed

ing

Rs.

10

Cro

res

incl

ud

ing

the

guar

ante

es a

lrea

dy

mad

e

Pro

vid

ing

Co

rpo

rate

Gu

ara

nte

e f

or

adh

oc

cash

cre

dit

faci

li�es

of R

s. 1

Cro

re

to J&

K B

ank

of b

ehal

f of E

tho

s Lt

d.

Eth

os

Ltd

Co

rpo

rate

G

uar

ante

e

Co

rpo

rate

G

uar

ante

e7

.02

.20

18

NIL

Pro

vid

ing

Co

rpo

rate

Gu

ara

nte

e f

or

cred

it fa

cili�

es o

f Rs.

32

.75

Cro

re to

IDB

I B

ank

of b

ehal

f of E

tho

s Lt

d.

Dre

am D

igit

alTe

chn

olo

gy P

vt.

Ltd

.

Ret

ain

ersh

ip

Agr

eem

ent

Ad

viso

ry S

ervi

ces

30

.05

.20

17

NIL

Pro

vid

ing

co

nsu

lta

nc

y s

erv

ice

s,

we

bsi

te d

ev

elo

pm

en

t, a

dv

iso

ry

serv

ices

for

E-C

om

mer

ce b

usi

nes

s.

10

2 Y

ears

NA

NA

NA

NA

KDDL Limited

32

Sr.

5 6

7

8

9

KDDL Limited

33

Sr.

No

.

Nam

e(s)

of

the

rela

ted

par

ty a

nd

n

atu

re o

f re

la�

on

ship

Nat

ure

of

con

trac

ts/a

rran

gem

ents

/tr

ansa

c�o

ns

Du

ra�

on

of

the

con

trac

ts /

ar

ran

gem

ents

/tra

ns

ac�

on

s

Salie

nt

term

s o

f th

e co

ntr

acts

or

arra

nge

men

ts o

r tr

ansa

c�o

ns

incl

ud

ing

the

valu

e, if

an

y:

Dat

e(s

) o

f ap

pro

val b

y th

e B

oar

d, i

f an

y:

Am

ou

nt

pai

d a

s ad

van

ces,

if a

ny:

1.

Sa

bo

o C

oa�

ngs

Li

mit

ed

(En

�ty

ove

r w

hic

h

sign

ifica

nt

infl

uen

ce

is e

xerc

ise

by

the

KM

P/P

rom

ote

r D

irec

tors

Bu

sin

ess

Tran

sac�

on

s Tr

ansa

c�o

ns

in t

he

no

rmal

co

urs

e o

f b

usi

nes

s

du

rin

g 2

01

7-1

8

Par�

cula

rs

A

mt

(

Rs

in

.

lakh

)

No

t R

equ

ired

N

IL

i)P

urc

has

e o

f R

aw M

ater

ial e

tc

Ii) S

ecu

rity

Dep

osi

t

iii)

Ren

t re

ceiv

ed

5.4

0

9.5

4

6.7

5

2.

Pyl

ania

SA

(S

ub

sid

iary

Co

mp

any)

Bu

sin

ess

Tran

sac�

on

s

Tran

sac�

on

s in

th

e n

orm

al c

ou

rse

of

bu

sin

ess

du

rin

g 2

01

7-1

8

i)P

urc

has

e o

f R

aw M

ater

ial e

tc

ii)

Sale

of

Go

od

s &

Ser

vice

s

iii)G

uar

ante

e C

har

ges

rece

ived

iv)

Pu

rch

ase

of

Fixe

d A

sset

s

iv)

Re

-im

bu

rsem

ent

of

exp

ense

s

v) G

uar

ante

es g

iven

vi)

Sale

of

fixe

d a

sset

s

vii)

Jo

b w

ork

ch

arge

s

14

.29

2

52

.86

12

.77

42

.84

12

3.8

8

30

0.3

4

11

.99

21

.76

No

t R

equ

ired

NIL

3.

Eth

os

Lim

ited

Bu

sin

ess

Tran

sac�

on

s

Tran

sac�

on

s in

th

e n

orm

al c

ou

rse

of

bu

sin

ess

du

rin

g 2

01

7-1

8

i)P

urc

has

e o

f R

aw M

ater

ial e

tc

ii)Sa

le o

f G

oo

ds

& S

ervi

ces

iii)S

alar

y o

f em

plo

yees

rec

ove

red

iv)

Ren

t re

ceiv

ed

v) E

xpen

ses

reco

vere

d

vi)

Inve

stm

ents

mad

e

vii)

Ren

t p

aid

by

the

com

pan

y

vii)

Secu

rity

Dep

osi

t ta

ken

viii)

Gu

aran

tees

giv

en

ix)

Pre

fere

nce

sh

are

red

eem

ed

x) R

e-i

mb

urs

emen

t o

f ex

pen

ses

10

.04

6.2

4

1.6

2

13

.26

5.7

3

22

50

.58

17

.70

6.7

7

59

69

.31

30

0.0

0

6.7

7

No

t R

equ

ired

NIL

Kam

la T

esio

Dia

ls L

td

Bu

sin

ess

Tran

sac�

on

s

Tran

sac�

on

s in

th

e n

orm

al c

ou

rse

of

bu

sin

ess

du

rin

g 2

01

7-1

8

I)

Ren

t Pa

id

II)

Exp

ense

s

reco

vere

d

6.0

0

0.0

2

No

t R

equ

ired

NIL

4.

Satv

a Je

wel

lery

&

Des

ign

Lim

ited

Bu

sin

ess

Tran

sac�

on

sTr

ansa

c�o

ns

in t

he

no

rmal

co

urs

e o

f b

usi

nes

sd

uri

ng

20

17

-18

i) R

ent

Paid

ii) In

tere

st R

ecei

ved

iii)

exp

ense

sre

cove

red

6.0

01

4.5

02

.74

No

t R

equ

ired

N

IL

1.

Co

ntr

acts

/arr

ange

men

ts e

nte

red

into

by

the

com

pan

y w

ith

rel

ated

par

�es

ref

erre

d to

in s

ub

-sec

�o

n (1

) of s

ec�

on

18

8 o

f th

e C

om

pan

ies

Act

,

20

13

wh

ich

are

at a

rms

len

gth

bas

is:

Sr.

No

.

Nam

e(s)

of

the

rela

ted

par

ty a

nd

n

atu

re o

f re

la�

on

ship

Nat

ure

of

con

trac

ts/a

rran

gem

ents

/tr

ansa

c�o

ns

Du

ra�

on

of

the

con

trac

ts /

ar

ran

gem

ents

/tra

ns

ac�

on

s

Salie

nt

term

s o

f th

e co

ntr

acts

or

arra

nge

men

ts o

r tr

ansa

c�o

ns

incl

ud

ing

the

valu

e, if

an

y:

Dat

e(s

) o

f ap

pro

val b

y th

e B

oar

d, i

f an

y:

Am

ou

nt

pai

d a

s ad

van

ces,

if a

ny:

5.

D

ream

Dig

ital

Te

chn

olo

gy L

imit

ed

Bu

sin

ess

Tran

sac�

on

s

Tran

sac�

on

s in

th

e n

orm

al c

ou

rse

of

bu

sin

ess

d

uri

ng

20

17

-18

i)

Man

agem

ent

con

sult

ancy

fee

ii)

Ex

pen

ses

re

cove

red

iii

)

Inte

rest

Pai

d

iv

)

Inte

r co

rpo

rate

dep

osi

t re

ceiv

ed

v)

R

ent

rec

eive

d

vi

)

Rei

mb

urs

emen

t o

f ex

pen

ses

21

.00

0

.47

4

.02

1

00

.00

0

.20

1

.05

No

t R

equ

ired

NIL

6.

Var

dh

an P

rop

er�

es

and

Inve

stm

ent

Lim

ited

Bu

sin

ess

Tran

sac�

on

s

Tran

sac�

on

s in

th

e n

orm

al c

ou

rse

of

bu

sin

ess

du

rin

g 2

01

7-1

8

i)

Inte

rest

Pai

d

ii)

Inte

r co

rpo

rate

dep

osi

t re

ceiv

ed

iii

)

Inte

r co

rpo

rate

dep

osi

t re

pai

d

iv

)

Inte

rest

Inco

me

v)

Dep

osi

t

(FD

R)

acce

pte

d

vi

)

Div

iden

d p

aid

4.2

5

5

00

.00

50

0.0

0

11

.34

17

.00

0.2

4

No

t R

equ

ired

NIL

7.

VB

L In

no

va�

on

s P

vt.

Lim

ited

Bu

sin

ess

Tran

sac�

on

s

Tran

sac�

on

s in

th

e n

orm

al c

ou

rse

of

bu

sin

ess

du

rin

g 2

01

7-1

8

Nil

No

t R

equ

ired

NIL

8.

Var

dh

an

Inte

rna�

on

al L

imit

ed

Bu

sin

ess

Tran

sac�

on

s

Tran

sac�

on

s in

th

e n

orm

al c

ou

rse

of

bu

sin

ess

du

rin

g 2

01

6-1

7

No

t R

equ

ired

NIL

9.

Mah

en B

ou

�q

ues

Ltd

.

Bu

sin

ess

Tran

sac�

on

s

Tran

sac�

on

s in

th

e n

orm

al c

ou

rse

of

bu

sin

ess

du

rin

g 2

01

6-1

7

No

t R

equ

ired

NIL

10

.

Ash

a D

evi S

abo

o

Bu

sin

ess

Tran

sac�

on

s

Tran

sac�

on

s in

th

e n

orm

al c

ou

rse

of

bu

sin

ess

du

rin

g 2

01

7-1

8

i)

Inte

rest

Pai

d

ii)

Div

iden

d P

aid

1.1

4

0.4

6

No

t R

equ

ired

NIL

11

.M

r. R

.K. S

abo

o.

Bu

sin

ess

Tran

sac�

on

sTr

ansa

c�o

ns

in t

he

no

rmal

co

urs

e o

f b

usi

nes

sd

uri

ng

20

17

-18

i)M

anag

emen

t co

nsu

ltan

cy

fee

ii)D

ivid

end

Pai

d1

5.0

02

9.7

2

Exis

�n

g C

on

trac

tN

IL

KDDL Limited

34

Nil

Nil

Nil

Nil

Nil

No

.N

ame(

s) o

f th

e re

late

d p

arty

an

d

nat

ure

of

rela

�o

nsh

ip

Nat

ure

of

con

trac

ts/a

rran

gem

ents

/tr

ansa

c�o

ns

Du

ra�

on

of

the

con

trac

ts /

ar

ran

gem

ents

/tra

ns

ac�

on

s

Salie

nt

term

s o

f th

e co

ntr

acts

or

arra

nge

men

ts o

r tr

ansa

c�o

ns

incl

ud

ing

the

valu

e, if

an

y:

Dat

e(s

) o

f ap

pro

val b

y th

e B

oar

d, i

f an

y:

Am

ou

nt

pai

d a

s ad

van

ces,

if a

ny:

12

.M

r.Yas

ho

vard

han

Sa

bo

o

Bu

sin

ess

Tran

sac�

on

s

Tran

sac�

on

s in

th

e n

orm

al c

ou

rse

of

bu

sin

ess

d

uri

ng

20

17

-18

i)

Ren

t p

aid

ii)

Rem

un

era�

on

iii)

D

ivid

end

Pai

d

28

.64

1

24

.01

2

2.6

4

Exis

�n

g C

on

trac

t

NIL

13

.M

s. A

nu

rad

ha

Sab

oo

. R

ent

Paid

fo

r P

rop

erty

Tr

ansa

c�o

ns

in t

he

no

rmal

co

urs

e o

f b

usi

nes

s

du

rin

g 2

01

7-1

8

R

ent

Paid

i) ii)

Div

iden

d P

aid

15

.00

5

.76

Exis

�n

g C

on

trac

t

N

IL

14

.M

s. U

sha

Sab

oo

Ren

t Pa

id f

or

Pro

per

ty

Tran

sac�

on

s in

th

e n

orm

al c

ou

rse

of

bu

sin

ess

du

rin

g 2

01

7-1

8

i)R

ent

Paid

i)

D

ivid

end

pai

d

6.7

7

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KDDL Limited

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KDDL Limited

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http://www.kddl.com/html/csr_policy.html



Annexure - '6'

Directors' Report

A. Summary of Status of ESOPs granted

The posi�on of the exis�ng scheme is summarized as under:

S. No. Par�culars Details

1. Details of the mee�ng Authorized by the Shareholders of the Company on September 15, 2011.

2.

Approved limit

Upto 1,10,000 stock op�ons in aggregate

3.

The Pricing Formula

Exercise Price is Rs 120/-

per op�on.

4.

Op�ons granted

84,000

5.

Op�ons vested and exercisable

0

6.

Op�ons exercised

39,750

7.

Op�ons cancelled

0

8.

Op�ons lapsed

23,250

9.

Total number of op�ons in force

21,000

10.

Varia�on in terms of ESOP

Not Applicable

11.

Total number of shares arising as a result of exercise of op�ons

39,750

12.

Money realized by exercise of op�ons

Rs. 47.70

Lacs

B. Employee-wise details of op�ons granted during the financial year 2017-18 to:

(i) Senior managerial personnel None

(ii) Employees who were granted, during any one year, op�ons amoun�ng to 5% or more of the op�ons granted during the year

None

(iii)

Iden�fied employees who were granted op�ons, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the �me of grant

None

KDDL Limited

39

C. Weighted average Fair Value of Op�ons granted during the year whose

(a) Exercise price equals market price 120/-

(b) Exercise price is greater than market price No

(c) Exercise price is less than market price Yes

Weighted average Exercise price of Op�ons granted during the year whose

(a) Exercise price equals market price Nil

(b) Exercise price is greater than market price NIL

(c) Exercise price is less than market price NIL

D. The stock based compensa�on cost calculated as per the intrinsic value method for the financial year 2015-16

is Rs 76737/-. If the stock based compensa�on cost was calculated as per the fair value method, the total cost to

be recognized in the financial statements for the year 2015-16 would be Rs 397692/-. Had the Company adopted

the fair value method, net profit a�er tax would have been lower by Rs 3,20,955/- for the financial year 2015-16.

The effect of adop�ng the fair value method earnings per share is presented below: In Rs

Earnings Per Share: Basic - As reported -

Adjusted Proforma

12.97

Earnings Per Share: Diluted

-

As reported -

Adjusted Proforma

12.96

10.13

KDDL Limited

40

10.12

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS

AND OUTGO PURSUANT TO THE PROVISIONS OF SECTION 134(3)(M) OF THE COMPANIES

ACT, 2013 READ WITH THE COMPANIES (ACCOUNTS) RULES, 2014:

A. CONSERVATION OF ENERGY :

a) Steps taken for conserva�on: The Company con�nues to give high priority to conserva�on of energy on

an on-going basis. A few significant measures taken are:

i) Periodical and preven�ve maintenance of electric equipments and ensured op�mum u�liza�on of

electric energy.

ii) Phased balancing of hea�ng and ligh�ng load.

iii) Increase in power factor by installing capacitor at the individual machines.

b) Steps taken for u�lizing alternate sources of energy :-

Cost of power is negligible in total cost of produc�on.

c) Capital investment on energy conserva�on equipments:-

Further energy conserva�on is planned through replacement of and modifica�on of inefficient

equipments and by providing automa�c controls to reduce idle running of equipments.

B. TECHNOLOGY ABSORPTION:

Efforts made for technology absorp�on

1. Research and Development (R & D):

a) Specific areas on which R & D carried on by the Company: Research and Development has been

carried out for quality improvement, new product developments and produc�vity improvement.

b) Benefits derived as a result of the above R & D: Increase in overall efficiency, produc�vity and quality

of outgoing product and a wider range of watch components along with incremental business from

customers

c) Future plan of ac�on: Further improvement in produc�on processes, to develop new dial finishes, new

types of index, development of tools and components and reduc�on of costs would con�nue.

d) Expenditure on R&D: No separate account is being maintained by the company for the expenditure

incurred on R&D. However, the Company is incurring recurring expenditure towards development

ac�vi�es.

2. Technology Absorp�on, Adapta�on & Innova�on :

Efforts, in brief, made towards technology absorp�on, adapta�on and innova�on: The Company is

constantly engaged in in-house R&D and is in constant touch with the new technologies.

Benefits derived as a result of the above efforts: Due to con�nuous developmental efforts, the Company

has been able to produce much more complicated dials which were being imported un�l now.

KDDL Limited

41

Annexure - '7'

3. i) Technology imported: None a�er 1995.

ii) Year of Import: N.A.

iii) Has technology been fully absorbed? : Yes.

iv) If not absorbed, area where this has not taken place, reasons thereof and future plans of ac�on: N.A.

v) The expenditure incurred on Research and Development: N.A.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO � � (Rupees in Millions)

2017-18

Foreign Exchange earnings 736.81

Foreign Exchange outgo 45.62

KDDL Limited

42

Par�culars of Employees

PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 134(3)(q) OF THE COMPANIES ACT, 2013 READ WITH

RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES,

2014

KDDL Limited

43

Annexure - '8'

S.No.

Requirements of Rule 5(1)

Details

(i)

The ra�o of the remunera�on of each director to the median remunera�on of the employees of the company for the financial year

Mr. Yasho Saboo

47.2

: 1

Mr. Sanjeev Masown

24.5

: 1

(ii)

The percentage of increase in remunera�on of each director, Chief Financial Officer, Chief Execu�ve Officer, Company Secretary or Manager, if any, in the Financial year;

Name

As per Payout

As per Terms

Mr. Yasho Saboo

67.2%

87.1%

Mr. Sanjeev Masown

18.4%

10.5%

Mr. Raman Sood

32.3%

9.4%

The difference in Terms of appointment and actual payout is due to variable component, which is linked to performance of individual and company against the agreed parameter.

(iii) The percentage increase in the median remunera�on of employees in the financial year;

13.4%

(iv) The number of permanent employees on the rolls of company;

1070 employees as on 31.03.2018

(v)

Average percen�le increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percen�le increase in the managerial remunera�on and jus�fica�on thereof and point out if there are any excep�onal circumstances for increase in the managerial remunera�on;

Average Salary increase of non-managerial employees is 11.8%

Average salary increase

of managerial

employees is 16.0%

There are no excep�onal circumstances in increase in managerial remunera�on.

(vi) Affirma�on that the remunera�on is as per the remunera�on policy of the company.

Remunera�on paid during the year

is as per the Remunera�on Policy of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

AN OVERVIEW OF THE ECONOMY

Global Economy

Global economy ac�vity con�nues to firm up. Global growth strengthened in 2017 to 3.8 percent from the expecta�on of 3.5%, with a notable rebound in global trade. It was majorly driven by an investment recovery in advanced economies, con�nued strong growth in emerging Asia, a notable upswing in emerging Europe, and signs of recovery in several commodity exporters. Key emerging market and developing economies, including Brazil, China, and South Africa, also posted third-quarter growth stronger than the fall forecasts.

As per the latest IMF report, world growth forecast for 2018-19 has been revised by 0.2% to 3.9%. supported by strong momentum, favourable market sen�ment, accommoda�ve financial condi�ons, and the domes�c and interna�onal repercussions of expansionary fiscal policy in the United States.

Indian Economy

India's economic growth is expected to strengthen to 7.3% in financial year 2018-19 (April-March) from 6.6 per cent in fiscal 2017-18 on the back of robust ac�vity from the construc�on, manufacturing, and services sectors. The nega�ve shock from demone�sa�on and GST implementa�on has largely subsided. Moreover, con�nued economic liberaliza�on by the Narendra Modi administra�on will likely provide tailwinds for India's large services sector, which accounts for slightly more than half of the economy.

India's gross domes�c product (GDP) is expected to reach US$ 6 trillion by FY27 and achieve upper-middle income status on the back of digi�sa�on, globaliza�on, favourable demographics, and reforms, it is also expected to be the third largest consumer economy as its consump�on may triple to US$ 4 trillion by 2025, owing to shi� in consumer behaviour and expenditure pa�ern. India's ranking in the world has improved to 126 in terms of its per capita GDP, based on purchasing power parity (PPP) as it increased to US$ 7,170 in 2017. This augurs well for luxury goods sector which is expected to cross USD 30 billion from USD 23.8 billion by the year-end on back of growing exposure of interna�onal brands amongst Indian youth and higher purchasing power of the upper class in �er II and III ci�es.

GST was a major reform introduced by the government in 2018 a�er being in the pipeline for over a decade. Although ini�ally the higher rates and implementa�on on a country level affected the business, the collec�ons from GST has gradually started picking up pace. The average GST collec�ons �ll march were Rs 89,800 crore per month but the collec�on exceeded Rs 1 lakh crore for April thus showing good posi�ve output growth in the country. The recent introduc�on of the E-way bill is expected to further reduce the dura�on for shipment of goods across the country and have a posi�ve effect on the growth.

Swiss Watch Industry

The situa�on of Swiss watch industry exports improved steadily during 2017. A�er declining for two consecu�ve years and reaching a new threshold, demand gradually picked up again. A growing number of markets returned to growth, but several of them are s�ll lagging.

During the year, Swiss watch exports fell just short of 20 billion francs mark and posted a result of 19.9 billion, up 2.7% against 2016. The trend stabilized in the first half (+0.3%), while the second saw substan�al growth (+4.9%).

Wristwatch exports dictated the general trend. Their value reached 18.8 billion francs, equivalent to 2.9% growth over 2016. However, the volume of watches con�nued to fall and 1.1 million fewer pieces were exported (-4.3%) with a total of 24.3 million pieces. This was the lowest figure since the 2009 crisis. The decline in volumes was influenced by quartz watches which posted a fall of 7.4%. On the other hand, mechanical watches grew both in terms of value (+4.6%) and number of pieces (+3.9%).

KDDL Limited

44

Annexure - ‘9'

Asia (+4.8%), which generated one-half of all export sales, was the growth driver in 2017 thanks to a very good second half. Europe (+2.6%) saw more modest growth and slowed slightly but remained an important player in the recovery. United Stated failed to follow the same trend and depressed the figures for the whole American con�nent (-2.7%). Most of the far eastern markets reported growth in 2017, while the middle east was confronted with a more difficult situa�on. Recovering since the spring, Hong Kong (+6.0%) ended the year with strong growth. China (+18.8%) had been first to recover and posted the strongest advance of all these countries.

In Europe, the United Kingdom was the main source and saw a growth of +7.0%. The other markets remained stable or fell slightly. United States sales were down for third year in a row and reported a decline of 4.4%. Despite favourable economic condi�ons, this market is proving slow to recover its taste for luxury products, at least through the tradi�onal sales channels.

Main markets for Swiss Watches

Geographical distribu�on (in CHF million)

Main watch expor�ng countries (Direct Exports)

KDDL Limited

45

The forecasts made last year were confirmed a few months earlier than expected and the industry's dynamic is looking good for the future. Development of digital communica�on and distribu�on channels and the types of consump�on favoured by the millennials will be priori�es in 2018. In this context, watch industry export growth is likely to be comparable to that observed in 2017.

Countries Units in Million

Change in %

Units in Million

Change in %

2017

2016

China

688.3

+5.6%

652.0

-4.5%

Hong Kong

227.9

-5.4%

241.0 -12.9%

Switzerland

24.3

-4.3%

25.4

-9.8%

Germany

15.8

-12.9%

17.5

-20.5%

USA 11.1 +5.8% 10.4 +9.2%

Countries Value in 2017

Value in 2016 Change in %

Share in % 2017

Share in % 2016

Hong Kong

2524.7

2382.6

+6.0%

12.7% 12.3%

USA

2050.1

2145.3

-4.4%

10.3% 11.1%

China

1536.7

1293.4

-18.8%

7.7% 6.7%

United

Kingdom

1290.5

1206.4

+7.0%

6.5% 6.2%

Japan

1229.4

1261.9

-2.6%

6.2% 6.5%

Italy

1181.1

1180.8

+0.0%

5.9% 6.1%

Other Countries

10,111.3 9,936.2 +1.8% 50.7% 51.1%

Total 19,923.8 19,406.6 +2.7% 100.0% 100.0%

As the leading watch expor�ng country by number of pieces, China saw its volumes grow by 5.6% in 2017. It exported 668.3 million watches across the world at an average price of 4 dollars.

On the other hand, Hong Kong exports fell for seventh year in a row and it exported 227.9 million watches recording a decline of 5.4%. The average price of the watches stood at 26 dollars, against 24 in 2016.In value terms, Hong Kong exports were at USD 8.4 billion declining by 4.7%.

Switzerland remained in third place and it exported 24.3 million watches in 2017 i.e. 2.3% less than the previous year and average price rose from 708 to 827 dollars, clearly reflec�ng the lackluster response at the bo�om of the price range segment. In value terms, Switzerland maintained its leading posi�on with exports worth USD 20.2 billion.

Overall, the Swiss watch industry is more op�mis�c about the future compared to last year and there is a growing op�mism about Swiss economy and the main exports markets. The broad reason of op�mism is higher expecta�ons for growth in almost all regions, especially in Asia. One major factor that has boosted consump�on of luxury goods including high-end watches is the drop in China's corrup�on prosecu�ons. In 2016 China's courts prosecuted 20% fewer officials for corrup�on than in 2015. For the first �me in five years the number of officials handed over to China's courts decreased, marking a turning point in China's an�-corrup�on and an�-briberycampaign.

In addi�on, Chinese buyers are now more inclined to buy their luxury products domes�cally following the rise in import taxes(from 30 to 60%) and increased controls at Chinese customs. A�er two years of nega�ve growth rates, sales of luxury goods including jewellery and watches in Hong Kong increased slightly in the first half of 2017, mainly because of the recovery in visitor arrivals from China. However, it is unclear whether the tourist industry will totally recover.

Despite the poli�cal uncertainty following the results of the US presiden�al elec�on in November 2016, watch brands con�nue to believe in the importance and poten�al of the US market. More than two years a�er the Swiss Na�onal Bank's surprise removal of the CHF/EUR floor, watch companies have learned to cope with the strong Swiss Franc rela�vely well.

Another major development during the year was the implementa�on of the new Swiss Made rules in early 2017, requiring at least 60% of a watch's manufacturing costs to be incurred in Switzerland. However, the economic impact of this new regula�on is unclear

so far, especially considering manufacturers benefit from a transi�on period of two years to adapt. On one hand, these new rules might indeed pose a risk to the lower-end of the Swiss watch industry for which it could be difficult to remain compe��ve with these new requirements. On the other hand the revised Swiss Made rules might strengthen the Swiss brand, an important compe��ve advantage of the Swiss watch industry.

The growing importance of having a digital strategy is not surprising given that online and digital channels con�nue to rise. Un�l recently many Swiss watch brands had tended to be reluctant to adopt online sales channels; however, this no longer seems to be the case. Tag Heuer recently introduced a limited edi�on to be sold exclusively online in the US. In November2016 IWC announced its partnership with the online-only luxury retailers Mr Porter and Net-A-Porter highligh�ng its ambi�on to focus on e-commerce. Some luxury watch-brands also partnered with blogs to launch limited edi�ons. This is most notably the case of MB&F, Vacheron Constan�n or Zenith with the online wrist watch magazine Hodinkee. In January 2017, Omega also launched its first watch officially sold online, the limited edi�on Speed master Speedy Tuesday, in partnership with Fratello Watches. These moves come in addi�on to the growing development of mono-brand e-bou�ques by many Swiss watch brands.

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2017 marked the second version of the Tag Heuer smartwatch and the first move by Montblanc and Louis Vui�on into this category. The fact that low-end watches (below CHF 200) have seen the sharpest decline in 2016 among all price segments and have s�ll not recovered in the first half of 2017 indicates that smartwatches might be hur�ng lower-end Swiss watches to a certain extent, although increasing compe��on from fashion watch brands is also a poten�al factor. Although smartwatches recently overtook Swiss wrist watches in terms of total units, the percep�on of the market seems to remain the same: real benefits of smartwatches beyond fitness and health tracking are s�ll lacking for many consumers.

Overview of Indian Retail Sector

Introduc�on

The Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. It accounts for over 10% of the country's Gross Domes�c Product (GDP) and around 8% of the employment. India is the world's fi�h-largest global des�na�on in the retail space.

Indian Retail Industry has immense poten�al as India has the second largest popula�on with affluent middle class, rapid urbanisa�on and solid growth of internet.

Market Size

India's retail market is expected to increase by 60% to reach US$ 1.1 trillion by 2020, on the back of factors like rising incomes and lifestyle changes by middle class and increased digital connec�vity. While the overall retail market is expected to grow at 12% per annum, modern trade would expand twice as fast at 20% per annum and tradi�onal trade at 10%. Indian retail market is divided into “Organised Retail Market” which is valued at $60 billion which is only 9% of the total sector and “Unorganised Retail Market cons�tutes the rest 91% of the sector.

India has replaced China as the most promising markets for retail expansion, supported by expanding economy, coupled with booming consump�on rates, urbanizing popula�on and growing middle class. India is expected to become the world's third-largest consumer economy, reaching US$ 400 billion in consump�on by 2025.

The size of modern retail in India is expected to double to Rs 171,800 crore (US$ 25.7 billion) from Rs 87,100 crore (US$ 13 billion) in three years driven by omni-channel retail.

Government Ini�a�ves

The Government of India has taken various ini�a�ves to improve the retail industry in India. Some of them are listed below:

The Government of India may change the Foreign Direct Investment (FDI) rules in food processing, in a bid to permit e-commerce companies and foreign retailers to sell Made in India consumer products.

Government of India has allowed 100% Foreign Direct Investment (FDI) in online retail of goods and services through the automa�c route, thereby providing clarity on the exis�ng businesses of e-commerce companies opera�ng in India.

Overview of Indian Luxury Market

India's luxury market is set to grow to USD 30 billion from USD 23.8 billion by the year-end on back of growing exposure of interna�onal brands amongst Indian youth and higher purchasing power of the upper class in �er II and III ci�es.

Economic growth, leading to urbanisa�on and higher disposable incomes, has helped propel growth of luxury goods. Moreover, increasing retail presence of luxury players across the country and higher numbers of brands entering the country has resulted in strong performance of luxury goods.

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Well-travelled consumers and a stable economy, coupled with a young popula�on with growing disposable incomes, spell good news for luxury brands across the world. With posi�ve regula�ons and policies for the retail industry being put in place by the government, India is a market that can no longer be ignored by interna�onal brands.

Luxury can be demonstrated as not just buying labels for status, but buying beliefs which are high quality, ethical and offer innova�ve cra�s. Today, one size no longer fits all. It is about providing the audience with something that matches their personality and make them feel a certain way. It has come a long way in that aspect. The en�re shopping scenario is changing, and luxury products are favoured more and more day by day. People are changing in what way they want from luxury standpoint today. It's no more just about great cloth quality, fit and silhoue�e but also about the kind of experience, guidance and comfort they get when they visit the store.

The demonstra�on of luxury retail industry growing owes a lot to do with the viral usage of social media by the general public, today most of the trends are set on social media. People are ardent users of social media pla�orms like Facebook, Instagram, Twi�er. Today's genera�on is well informed, and they seek reviews before making a purchase, which has majorly impacted the posi�ve growth in retail sectors. People today are more opinionated about how they want to be perceived in the society. Their preference is no longer just restricted to the colour or fit, they now demand for an experience that's larger than life, giving them a good overview of designs, more variety, guidance on the silhoue�e that are met well by the luxury retailers.

Over the decade, the luxury retail segment has come a long way and has evolved and gained importance and success. There are many brands that have entered the Indian market, few have le� and few re-entering. The expansion of retail sector has been a major growth driver for growth in India. The Indian retail real estate market has witnessed con�nuous footprints of global brands coming in India. More than 300 prominent and renowned global retailers, found that mostly Interna�onal retailers opt for opening their stores in major metropolitan ci�es such as New Delhi or Mumbai, before gradually expanding and escala�ng to other �er one loca�ons, including Bangalore, Chennai, Kolkata, Hyderabad and Pune.

However, lack of suitable infrastructure, high tax rates, rental costs and parallel growing market of counterfeits are some major problems that are a cause of concern for luxury players entering India.

Thus, the Indian market represents huge opportunity for the foreign luxury players, but it needs to fix the exis�ng loopholes.

Indian luxury market is poised to expand five-fold in next three years and the number of millionaires is expected to mul�ply three �mes in five years.

Overview of Indian Watch Industry

The current situa�on of watch market in India is looking good especially for luxury, which is a niche segment. Innova�ons in luxury watch market play a crucial role as it drives the market growth. Also, the factors like rising economy with double and disposable income, increasing popula�on in young age group, increasing purchasing power and brand op�ons, help in growth of this sector. Today, owning a good �mepiece is a style statement. The growing demand for luxury products also drives the market growth for luxury watches. The Swiss watches or the luxury watches has its own aura around the world and India is untouched by them. While the market was ini�ally aimed at men, it has grown to become an essen�al piece of accessory for women as well.

GST & Custom Duty

Before the introduc�on of GST, watches were taxed at around 12.5%. The GST pushed up the tax rate to 28% before it was rolled back to 18% in November.

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A�er GST revision from 28% to 18% on watches, India had become one of the cheapest des�na�ons for luxury watches. Customers, who shopped abroad, had started buying watches here. But due to the recent increase in custom duty for imported watched to 20% we are back to original posi�on.

Customs duty on watches is incorporated in the cost price and GST is calculated over and above that. Unfortunately, luxury is always at the receiving-end in India.

Before the customs duty hike, the dual-blow of demone�sa�on and GST weighed heavily on the luxury watch market because most transac�ons in the luxury segment were cash-based. Wealthy shoppers wary of the crackdown on black money had started to shop abroad. Retailers turned to offering heavy discounts to tackle tepid demand, despite taking a hit on their margins.

BUSINESS OVERVIEW

KDDL Limited is one of the leading Companies in India in manufacture of watch components and also emerging as a strong engineering company for manufacture of high quality precision stamped components and progressive tools for various applica�ons. KDDL also manages the largest retail chain luxury Swiss watches in the organised sector through its subsidiary, Ethos Limited.

The Company's revenues are primarily from manufacture of watch components, progressive tools, precision engineering components and sub-assemblies. An overview of the different business segments are given below:

Turnover

The turnover of the company witnessed a decent growth of 16% compared to a growth of 5% during the previous year despite the sluggish watch market environment in the 1�� half of financial year. The growth in turnover was primarily driven by the growth in the Precision Engineering business segment but others segments also maintained a healthy growth trend.

The watches component segment of company which has a major revenue share in the overall business recorded a growth of 12% in turnover mainly because of healthy growth in the domes�c market environment. Turnover from exports was also higher by 4.6% due to recovery in the Swiss market environment as compared to decline of 6% in previous year.

All segments of the manufacturing business witnessed growth in the opera�onal revenue. The overall turnover of company from domes�c market improved by 40% contributed mainly by the be�er market condi�ons and marginally by the increase in the GST Rates compared to earlier effec�ve rates. On the other hand, turnover from exports market improved by 5.5% compared to a decline of 4% in last year from respec�ve markets.

The watch components business of domes�c market saw a healthy growth of 37% in value terms compared to previous year. This is on top of the growth of 14.7% reported in previous year from same market segment. This year domes�c market condi�ons improved and revenue from all major customers and brands was on a growing trend. On the other hand, exports value of watch components business grew by 4.6% compared to a decline of 6.1% in the previous year due to recovery in Swiss market. This year the Swiss watch market and exports witnessed a reversal trend and shown a growth compared to last two years in row wherein the exports market remained sluggish. The major market segments are on recovery path and outlook is posi�ve.

EIGEN the precision engineering business of the company saw a very healthy growth of 37% in revenue compared to previous year because of be�er conversion of the leads and structured and focused marke�ng ini�a�ves for the selec�ve segments of the market. Overall market condi�ons were also be�er in the engineering segments industry.

Ornamental packaging manufacturing businesses of the company also witnessed revenue growth of 8.8% mainly due to addi�on of new customers in the domes�c segment.

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The Company's overall strategy is to con�nue focus on increasing exports of watch components to Swiss market and to accelerate the growth of Precision Engineering business by adding new capabili�es and increasing marke�ng efforts.

Watch Components

During the year, dials units of the company located at Parwanoo and Baddi (H.P) and Derabassi (Punjab) improved the capacity u�liza�ons due to be�er order posi�on both from domes�c and export markets. The overall revenue of Dial units improved by 27% compared to a decline of 10% in previous year. The Dial units' revenue from domes�c market grew by 43% against a growth of 12% in the previous year and in export market revenue grew by 14% against a decline of 22% in previous year. All major customers and brands, both in domes�c and exports Swiss market showed healthy recovery and the order posi�on was much healthier compared to previous year and this was reflected in the overall recovery of revenue in the watch dials business.

The overall revenue of Watch Hands Units of the Company located at Bangalore registered a growth of 7% compared to growth of 11% in the previous year. The revenue of Hands unit from domes�c market increased by 36%, but the revenue from exports market declined marginally by 1% compared to previous year. In the previous year domes�c and exports market revenue had improved by 18% and 7% respec�vely.

Precision Engineering Components

The overall revenue of our precision components manufacturing unit at Bangalore witnessed a healthy growth of 38% compared to a growth of 28% in the previous year. The growth in turnover of the unit was from all segments and markets catered by the unit. The year on year growth in revenue from domes�c market was 45%, whereas the direct and indirect exports market grew by 15% compared to previous year. During the year, company con�nued its efforts and ini�a�ves for increasing its presence and reach with the poten�al customer segments, by regular par�cipa�ons in the relevant trade fairs and exhibi�ons.

Other Businesses

Another business of the company relates to manufacture of Packaging for the Ornamental Jewellery, Watches, Wri�ng Instruments and other accessories. The revenue of the company from this business improved by 6% compared to a marginal decline of 0.7% in the previous year.

Strategic Ini�a�ves

The financial year 2016-17 had witnessed suppressed market condi�ons and the beginning of 2017-18 was with slightly improved market condi�ons in the Swiss watch industry. There was a general percep�on and impression that market will start improving on quarterly basis and orders posi�on will be be�er than the previous year. This impression became reality and the order posi�on from Swiss market was healthier. This trend of improved market condi�ons was very strong in the domes�c watch market and all major brands reported healthy growth in the revenue.

Despite the varying trends in major global economies, there is a general op�mism in the Swiss watch industry that the growth of last year will be maintained in the current year also and all major brands are re-aligning their sourcing strategy to comply with the new SWISS ORIGIN regula�ons and some of the brands are being re-posi�oned.

The efforts of the company in the previous few year for consolida�on, restructuring of the watch dial manufacturing facili�es, enhancing the capabili�es to manufacture more complex and addi�onal features dials coupled with improvement in opera�onal parameters especially produc�vity and delivery compliance helped the company in mee�ng the challenge of improved market condi�ons and the company was be�er posi�oned to capture and encash the emerging opportuni�es.

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During the year, company ini�ated addi�onal efforts for enhancing the produc�vity of the key opera�onal areas and debo�lenecking the constraint areas. Many new ini�a�ves and specific area projects were iden�fied for enhancing the value of business by addressing the pain and bo�leneck areas. Company is con�nuously pu�ng efforts and resources for enhancing skills to op�mize opera�onal efficiencies, improving produc�vity and add capabili�es to manufacture addi�onal features, more complex components.

In line with the improved market condi�ons, the watch hands business of the company con�nued to capture market share from compe��on by offering new features and designs to customers and entered many new customers in the high end of segment by demonstra�ng the enhanced level of capability and execu�on skills. Company efforts for induc�on of some of the new customers from Hong Kong market is also encouraging and this ini�a�ve will help the company to capture business from the Far East market segment to generate healthy growth in the coming years.

The major focus of the company is to increase market presence in engineering business by enhancing the core capabili�es, adding value addi�ve capabili�es and aggressive marke�ng efforts.

As a part of this exercise, during the year, company con�nued its efforts for enhancing the growth of the Precision Stamped Components and Progressive tooling by structured marke�ng efforts for extending the customer reach and improving the flow of ini�al queries and conversion to orders. Company is show casing its technical capabili�es by par�cipa�ng in relevant Interna�onal Trade Fairs and Exhibi�ons and the response from these fairs is encouraging. The market response to Company efforts in the digital marke�ng of capabili�es and capaci�es in the targeted countries and the response / leads is healthy. The flow of RFQ's both from exis�ng and new customers are on the improving trend. Many new customers were added by the company, both from domes�c and exports markets. All leading indicators for the business growth are in the posi�ve direc�on.

In addi�on to this, the unit con�nues to focus on improving the internal efficiencies by improving manpower produc�vity, OEE, machines and tools efficiency thru' structured processes of enhancing skills, quality of machines and tools. The company con�nues to view precision engineering business as major growth drivers in the coming years.

The revenue of the company during the year increased from all type of capabili�es such as tool and mould making, stamped components, manufacture of plas�c injec�on moulded components and sub-assembly of the components.

During the year, company focused on the expansion project near Bangalore Airport in KIADB Aerospace Park. The expansion project got delayed due to heavy rains in the area and now it is progressing as per the revised schedule. During the year, company has also shi�ed the exis�ng opera�ons from one of its facili�es in Bangalore to the new facility and now these are opera�onal from new loca�on. Similarly, the new capability of electropla�ng has been established successfully and is being put to opera�onal use. Company plans to shi� the en�re opera�ons from another facility in Bangalore also to this new loca�on during the current financial year and the consolidated facility will be new capabili�es and addi�onal capaci�es will be fully opera�onal from the second half of the year.

During the year, the order posi�on of the Packaging business was also be�er compared to earlier years especially from the watch segment but the wri�ng instrument segment market slightly sluggish. Post demone�za�on of high currency notes by the Government of India in the previous year, market slowed down both in Wri�ng Instruments and Jewellery segment which necessitated the company to look for new customers from other segments. The efforts of the company to add new customers also gave sa�sfactory results and the order posi�on is now healthier.

The fluctua�ng order inflows, quality of customers and limited capabili�es con�nues to be a cause of concern.

During the year, the website of company www.ethoswatches.com, was u�lised to the maximum poten�al for enhancing the online leads and conversion. This pla�orm con�nues to be used by our subsidiary Ethos Limited.

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Company con�nues to iden�fy and eliminate the non-value added process for improving internal controls and efficiencies and during the year, company has extended the SAP tools for many addi�onal processes and automated many other processes for be�er compliances and cost op�miza�ons.

BUSINESS PERFORMANCE REVIEW

Revenue

The gross opera�ng income of the company improved from Rs. 1306 million to Rs. 1520 million represen�ng an increase of 16% over the previous year. The turnover of the company was broadly stable in both halves of the year, but first quarter was slightly low in the year as the ini�al impact of previous year sluggish market environment and market recovery coupled with the postponement of the dispatches by customers due to implementa�on of GST reduced order posi�on for the company. However, the market situa�on and order posi�on improved from second quarter onwards. The watch market condi�ons and overall environment was be�er compared to previous year and structured focus and efforts of the company helped in recording healthy growth.

The watch segment gross opera�ng income improved from Rs. 944 million to Rs. 1104 million recording a growth of 17%, compared to stagnant revenue in previous year. The precision engineering business stream revenue increased from Rs. 248 million to Rs. 339 million, registering a healthy growth of 37% compared to similar growth in the previous year. The revenue from residual business stream mainly comprising of ornamental packaging improved from Rs. 44 million to Rs. 48 million.

The domes�c sale of the company improved from Rs. 538 million to Rs. 754 million represen�ng a healthy growth of 40% compared to previous year growth of 21.5%, whereas the direct and indirect export revenue improved from Rs. 698 million to Rs. 737 million registering a growth of 5.5% against a decline of 4.3% in the previous year.

Margins

During the year the margins of the company improved due to market recovery leading to be�er order posi�on and efforts of the company on improving produc�vity and focus on reducing costs and overheads. In addi�on, strategic ini�a�ves of the company for developing and enhancing the revenue from Precision engineering business is helping in overall healthy growth.

The earnings before interest, deprecia�on, taxes and appropria�ons improved from Rs. 243 million to Rs. 322 million, increase of almost 33% over the previous year. The opera�ng EBIDTA earning a�er elimina�ng the excep�onal, abnormal cost and CSR expenditure improved to 222% from 19.1% achieved in previous year. The improvement in EBIDTA percentage was due to healthy revenue growth and be�er control over overheads.

Shareholders' Funds

The company's reserves improved from Rs. 1053 million as on 31�� March 2017 to Rs. 1198 million as on 31�� March 2018, on account of retained earnings from the profitability of the company and also due to receipt of share premium of Rs. 28.8 million on issue and allotment of 113206 equity shares of face value Rs. 10 each on a preferen�al basis for cash at a price of Rs. 265 (including premium of Rs. 255) during the year.

The Share capital of the company also increased from Rs. 109.2 million to Rs. 110.4 million on account of allotment of equity shares on preferen�al basis.

Loan Funds and Cost of Debt

The interest cost as a percentage to total revenue decreased substan�ally from 2.7% to 1.9% in 2017-18.The interest cost as a percentage to total revenue is declining for last 6 years in a row. During the year, Reserve Bank of India reduced the interest rates but banks con�nues to lag behind in passing on the benefit to customers. Company con�nues to reduce its high costs debts and working capital borrowings by effec�ve u�liza�on of

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available funds, which led to sharp reduc�on in the borrowing costs. All new debt borrowings of the company are being nego�ated and concluded at lower interest rates. The overall simple average cost of debt decreased to 6.7% from 8.6% during the previous year.

The Company con�nues to focus and op�mize the working capital cycle and reduce cost of borrowing by effec�ve use and availment of different financing op�ons. The company con�nues its efforts on restric�ng the overall borrowing of the company for be�er leverage.

Fixed Assets

Gross carrying amount of Fixed Assets of the company including Capital work in progress during the year increased from Rs. 719 million to Rs. 974 million mainly on account of expansion project of precision engineering business in KIADB Aerospace Park, near Bangaluru Airport. In addi�on some investment was done on increasing the working area for Watch hands manufacturing and other normal capital expenditure in the different units for increasing produc�vity, new product developments and addi�on of other assets for quality, safety, Informa�on technology and administra�ve func�ons.

Subsidiary Companies and Joint Ventures

Ethos Limited

FY17-18 began on a challenging note for the luxury watch retail business. The a�er effects of many regulatory changes con�nued to have an impact on the performance of the business in the first half of the year. These regulatory changes included the introduc�on of PAN requirement for transac�ons above Rs. 2 lakhs, requirement for collec�ng TCS for all transac�on in cash above Rs. 3 lakhs, demone�sa�on in November 2016 and the subsequent banning of all cash transac�ons above Rs. 2 lakhs with effect from 1 April 2017. The ini�al uncertain�es of the implementa�on of the GST regime also had a less than salutary impact of the business.

The business showed an impressive turnaround in the second half of the year. This came close on the heels of the changes in the GST rates on watches from 28% to 18%, consequent to which there was a reduc�on in the prices of watches. This fuelled demand in an already robust fes�ve and wedding season. The fact that the uptrend of demand con�nued even a�er the season period is a tes�mony to the fundamental strategic changes to the business model that have been brought over the past 2 years. These strategic changes included shi� in focus from ultra-high price watches (above Rs. 10 lakhs) and strengthening our presence in the price segment Rs. 50000 to Rs. 5 lakhs. The Company also embarked on an exclusive brand strategy which has yielded great results in form of be�er margins on back of lower discoun�ng. In addi�on to this, the Company increased our focus towards digital pla�orm and closed down stores which were not making reasonable sales. This also helped us to keep lean cost structure and improve our inventory days.

The revenues in FY 17 18 were Rs. 355.4 crores which were up by 10% over the previous year. Given that the tax rate changed quite significantly over the course of the year, a more appropriate comparison is on billings. Billings increased to Rs. 420 crores, an increase of 16% over the previous year. The billings increase in the second half of the year was 28% over the same period last year. The increase in billings was on the back of same store growth of 10% for the full year and 19% in the second half of the year.

The improvement in margins were also impressive. EBIDTA margins improved to 4.4% of net sales for FY 17 18, up from 1.0% for FY 16 17. Profit before tax for FY 17 18 was Rs. 5.3 crores compared to a loss of Rs. 8.7 crores in FY1617. Profit a�er tax for FY 17 18 was Rs. 4.0 crores compared to a loss of Rs. 6.5 crores in FY1617.

Pylania SA

During the financial year 2017-18 the manufacturing opera�ons of the company for manufacture of Watch Hands were stabilized and further machines and equipment's were added to enhance the capacity. In addi�on, par�al

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manufacturing and finishing opera�ons for watch dials were also ini�ated with the support of other outside manufacturers specially to take care of the emerging opportunity and demand for catering the SWISS ORIGIN requirements. During the year, company also witnessed growth in the watches trading to India for the some of the major Swiss Brands like Titoni, Corum, Raymond Weil and ORIS.

As a result of these ini�a�ves the revenue of the company during the year witnessed healthy growth to CHF 2831 K from CHF 1040 K in 2016-17, registering a healthy growth of more than 172%. During the year, company con�nued to provide consultancy and managerial services to customers also.

Management of Pylania con�nuous to keep a close watch and tap on restric�ng overheads and its financial posi�on is on the improving trend for last 5 years.

SWISS ORIGIN regula�ons which have been implemented w.e.f. 1st January 2017 also supported the revenue growth as many brands have shi�ed their sourcing strategy to comply with new legal requirements. Company is con�nuously evalua�ng recent changes in the rules and regula�ons and will accordingly plans to revisit its business model to meet the requirement of other customers for SWISS ORIGIN.

The Company has reported opera�onal profit of CHF 188 K during the financial year compared to profit of CHF 78 K in previous year.

The management is confident that with the recovery in Swiss watch market coupled with Swiss made regula�ons will help in maintaining the financial performance in terms of revenue and profitability.

Satva Jewellery and Design Limited

During the financial year, KDDL board and shareholders have approved the merger of this company with parent company to bring synergy in the opera�ons and to u�lize its resources for crea�ng value for shareholders. Presently merger ac�vi�es and procedures are in process and we expect that during the current financial year it will get merged with the parent company.

Human Resource Management

The skills and capabili�es of our team remain our most valuable asset. KDDL seeks to a�ract and retain the best talent available. Human Resource Management incorporates a process driven approach that invests regularly in the training and development needs of employees through succession planning, job rota�on, on the job training and extensive training workshops and programs. Company has also engaged external consultants and advisors for the various interven�ons to improve and building the human capital for the emerging business requirements.

The Company's Talent Management process focused on building talent at various levels in the organiza�on. A number of professionals in different func�ons had been hired keeping in mind the company's future needs to build a leadership pipeline. Also, new people had been hired to build capabili�es in new areas and to fill any gaps. As such, the Company has focused on developing internal talent through a robust iden�fica�on process and with a clear development plan designed for each such talent.

During the year the Company held various employee engagement programs in order to bolster employee morale inculcate a feeling of team work and camaraderie and create a mechanism to recognize individual and team contribu�ons to the organiza�ons. Programs such as Chairman's Annual Awards and Star Performer Awards recognize and reward individual and team achievements across the Group. The total number of manpower of the company, both regular and contractual was over 1500 during the year under review.

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INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

A strong internal control culture is an important focus and thrust area in the company. The company has comprehensive internal systems, controls and policies for all the major processes to ensure the reliability of financial repor�ng, �mely feedback on achievement of opera�onal and strategic goals, compliance with policies, procedures, laws, and regula�ons, safeguarding of assets and economical and efficient use of resources.

The formalized systems of control facilitate effec�ve compliance as per Lis�ng Regula�ons The company also has well documented Standard Opera�ng Procedures (SOPs) for various processes which are periodically reviewed for changes warranted due to business needs.

The Internal Auditors of the company con�nuously monitors the efficacy of internal controls/ compliance with SOPs with the objec�ve of providing to the Audit Commi�ee and the Board of Directors, an independent, objec�ve and reasonable assurance on the adequacy and effec�veness of the organiza�on's risk management, control and governance processes.

The scope and authority of the Internal Audit ac�vity are well defined in the Internal Audit scope and guidelines, approved by the Audit Commi�ee. Internal Auditors develops a risk based annual audit plan with inputs from major stake holders, and the major focus areas as per previous audit reports.

All significant audit observa�ons are reviewed periodically and follow-up ac�ons thereon are reported to the Audit Commi�ee. The Audit Commi�ee also meet the company's Statutory Auditors and Internal Auditors to ascertain their views on the financial statements, including the financial repor�ng system, compliance to accoun�ng policies and procedures, the adequacy and effec�veness of the internal controls and systems followed by the company.

The top and senior management of the company also assesses opportuni�es for improvement in business processes, systems and controls, provides recommenda�ons, designed to add value to the organiza�on and follows up on the implementa�on of correc�ve ac�ons and improvements in business processes.

The senior management of the company meets periodically to assess the performance of the each business segment and key func�ons of the company and areas for improvement of performance / controls are iden�fied and reviewed on con�nuous basis.

RISKS, THREATS AND CONCERNS

Risk means uncertain�es about events and their outcomes that could have a material impact on the performance and projec�ons of the Company. Since risk is inherent in every business, it is the Company's responsibility to minimize its incidence in order to protect and enhance shareholder value.

Our framework for comba�ng risks recognizes that risks may be divided into two broad categories – risks that are common and relevant for most business in general and risks that are more specifically applicable to your company and business in par�cular. The Risk Management Policy at KDDL inter-alia provides for Risk iden�fica�on, assessment, and repor�ng and mi�ga�on procedure. The Policy is con�nuously updated and adopted to the changing environment in which the Company operates.

Risks of General Nature

Risks rela�ng to the general macroeconomic environment of the Company include risks associated with poli�cal and legal changes, changes in tax structures, and commercial rules & laws. The Company keeps a proac�ve track to an�cipate such changes and mi�gate associated risks to the extent possible.

Risks related to man-made and natural disasters such as explosions, earthquakes, storms as well as civil disturbances are handled by following best prac�ces in the design of structures and “safety first” as a guiding

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principle while designing technical and business processes duly supplemented with requisite insurance coverage.

The third set of general risks relates to risks from market led changes. These include risks associated with sudden fall in GDP and growth rates, overall market condi�on in India and abroad, or sudden changes in market preferences. The mi�ga�on of these risks is achieved by a cost-effec�ve and flexible working structure which would allow the Company to scale up or scale down working in affected areas in accordance with the changes.

Specific Risks

We have iden�fied the following specific risks that need more detailed a�en�on in the present circumstances and business of the Company.

Risks due to decline in overall demand for watches: While we remain confident of a steady growth in the demand of watches in India over the next 10-12 years, we are aware of the decline of the watch as a �me keeping instrument. At the same �me, we see an evident increase in the watch becoming an important fashion accessory and also as an ac�vity monitoring cum communica�ng instrument. The risk of such decline in the func�onal value of a watch is mi�gated by posi�oning ourselves to be�er serve the watch as a fashion and wearable technology.

Risks pertaining to over dependence on few companies: The Company has enjoyed a close and mutually beneficial associa�on with several leaders in the watch business in India and Switzerland. This inevitably has lead to a substan�al part of the Company's business being related to these groups.

Notwithstanding the strong standing of these brands and companies and our Company's enduring rela�onship with them, we recognize that broad-basing our customer base and brand partner base is a priority to mi�gate any inherent risk from over-dependence on any specific partner. As a part of this exercise, company con�nues to enhance its customer base and also increasing its presence in the new fields and segments.

Risks related to over dependence on one business:The company is structurally focussing on increasing the revenue from other manufacturing business streams and strategically enhancing the growth of these segments, which will help is off-se�ng the over dependence on the watch segment. In order to overcome the risks of over dependence on watch components, company is aggressively focusing on the business growth from other business segment of precision engineering components and also adding new capabili�es for enhancement of revenue stream.

Foreign Exchange Risks: More than 50% of the Company's manufacturing turnover comes from exports, denominated in Swiss Francs and US Dollars. The fall and rise in these currencies can seriously impact the working of the Company in the short and medium term. In the current year, the fall in the value of these currencies will have a significant impact on the export earnings in Rupee terms and thereby on the profitability of the Company. This risk is mi�gated with several measures which include:

l Hedging of currencies to the extent reasonably possible, also keeping in mind natural hedge we enjoy by expor�ng and impor�ng in the same currency.

l Balancing of imports and exports.

Risk related to Personnel: Our business is increasingly dependent on the skills and competencies of our employees and management team. The general war for talent in our growing economy has created a risk related to the reten�on of key personnel both in manufacturing and retail sector. This risk is mi�gated through effec�ve HR policies rela�ng to recruitment and reten�on and a proac�ve remunera�on and rewards policy that is periodically reviewed at the highest management level.

56

CAUTIONARY STATEMENT

Certain statements made in the “Management Discussion and Analysis Report” rela�ng to the Company's objec�ves, projec�ons, outlook, expecta�ons, es�mates and others may cons�tute “forward looking statements' within the meaning of applicable laws and regula�ons. Actual results may differ materially from those expressed or implied. Important factors that could make significant difference to the Company's opera�ons and actual results include among others, Government Regula�ons, statutes, tax laws, economic developments within India and countries in which the company conducts businesses, li�ga�ons and other allied factors.

57

REPORT ON CORPORATE GOVERNANCE

I. COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE

Corporate Governance is the applica�on of best management prac�ces, compliance of laws, rules, regula�ons and adherence of standards for achieving the objec�ves of the Company, enhance shareholder value and discharge of social responsibility. The Corporate Governance structure in the Company assigns responsibility and authority to Board of Directors, its commi�ees and execu�ve management, senior management, employees etc.

The Company acknowledges its responsibility to its esteemed stakeholders. Even in a fiercely compe��ve business environment, the Management and the employees of the Company are commi�ed to uphold the core values of transparency, integrity, honesty and accountability which are fundamental to the Saboo Business Group. The Company believes that Corporate Governance helps to achieve commitment and goals to enhance stakeholder value by focusing towards all stakeholders. Any good corporate governance provides an appropriate framework for the Board, its commi�ees and the execu�ve management to carry out the objec�ves that are in the interest of the Company and its stakeholders. The Company maintains highest levels of transparency, accountability and good management prac�ces through the adop�on and monitoring of corporate strategies, goals and procedures to comply with its legal and ethical responsibili�es.

II. BOARD OF DIRECTORS

(a) Composi�on and a�endance in mee�ngs

The Board of Directors of the Company has an op�mum combina�on of execu�ve and non-execu�ve directors. The Board of Directors presently comprises of 9 (nine) members including 2 (two) Whole-Time directors, i.e., the Chairman–cum-Managing Director and the Whole Time Director-cum-Chief Financial Officer. The composi�on of the Board is in conformity with regula�on 17 of Securi�es & Exchange Board of India( Lis�ng Obliga�ons and Disclosure Requirement) Regula�ons, 2015 [ SEBI(LODR) Regula�ons]

st During the financial year ended on 31 March 2018, 6 (Six) Board Mee�ngs were held and the gap between two mee�ngs did not exceed four months. The dates on which the Board Mee�ngs were held are as follows:

th th th 30 May 2017 11 August 2017 14 September 2017

th th th 8 December 2017 7 February 2018 15 March 2018

The following table gives the composi�on and category of the Directors, their a�endance at the Board mee�ngs held during the year and at the last Annual General mee�ng, number of other boards or board commi�ees in which he/she is a member or chairperson:-

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Annexure – '10'

Except Mr. Yashovardhan Saboo and Mr. Jai Vardhan Saboo, none among other directors have any inter-se rela�onships.

Familiarisa�on programme for Independent Directors

Le�er of Appointment(s) are issued to Independent Directors se�ng out in detail, the terms of appointment, du�es, responsibili�es and expected �me commitments. The web link for the Familiariza�on Programmes for Independent Directors is -programme-for-the-independent-h�p://www.kddl.com/html/familirisa�ondirectors.html

III. COMMITTEES OF BOARD

Currently, the Board has four commi�ees: Audit Commi�ee, Nomina�on and Remunera�on Commi�ee, Corporate Social Responsibility Commi�ee and Stakeholders' Rela�onship Commi�ee.

1. AUDIT COMMITTEE

The scope of ac�vi�es of the Audit Commi�ee are as set out in Regula�on 18 of SEBI(LODR) Regula�ons, 2015 read with Sec�on 177 of the Companies Act, 2013. The terms of reference of the Audit Commi�ee are broadly as follows:

1. Oversight of the company's financial repor�ng process and the disclosure of its financial informa�on to ensure that the financial statement is correct, sufficient and credible;

Name of the Director

Business Rela�onship

Category of Directorship

No. of Board Mee�ngs a�ended

A�endance at the last AGM held on 11.08.2017

No. of Directorship in other Public Limited Companies

*No. of Commi�ee posi�ons held in other companies

Number of Shares / Conver�ble instruments held by non -execu�ve directors

Chairman Member

Mr. Yashovardhan Saboo

Chairman & Managing Director

Promoter-Execu�ve

6 Yes 6 1 3 -

Mr. Jagesh Khaitan

Director

Independent-Non Execu�ve

6

Yes

2

-

2

466

Mr. Anil Khanna

Director

Independent-Non Execu�ve

6

Yes

1

1

1

4283

Ms. Ranjana Agarwal

Director

Independent- Non Execu�ve

4

Yes

4

2

5

-

Mr. Praveen Gupta

Director

Independent- Non Execu�ve

5

No

1

-

1

-

Mr.Vishal Sa�nder Sood

Nominee Director

Non-

Execu�ve Nominee

3

Yes

3

-

-

-

Mr. Jai Vardhan Saboo

Director

Promoter-

Non Execu�ve

1

No

-

-

-

-

Mr. Sanjiv Sachar

Director

Independent-

Non Execu�ve

5

Yes

-

-

-

1400


Whole Time Director-cum- CFO

Execu�ve

6

Yes

1

-

-

(Commi�ee posi�ons includes only the membership of Audit Commi�ee, and Stakeholder's Rela�onship Commi�ee as per SEBI(LODR) Regula�ons, 2015)

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59

http://www.kddl.com/html/familirisation

2. Recommenda�on for appointment, remunera�on and terms of appointment of auditors of the company;

3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors;

4. Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for approval, with par�cular reference to:

a) Ma�ers required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-sec�on 3 of sec�on 134 of the Companies Act, 2013.

b) Changes, if any, in accoun�ng policies and prac�ces and reasons for the same

c) Major accoun�ng entries involving es�mates based on the exercise of judgment by management

d) Significant adjustments made in the financial statements arising out of audit findings

e) Compliance with lis�ng and other legal requirements rela�ng to financial statements

f) Disclosure of any related party transac�ons

g) Modified opinion(s) in the dra� audit report

5. Reviewing, with the management, the quarterly financial statements before submission to the board for approval;

6. Reviewing, with the management, the statement of uses / applica�on of funds raised through and issue (public issue, rights issue, preferen�al issue, etc.), the statement of funds u�lized for purposes other than those stated in the offer document / prospectus / no�ce and the report submi�ed by the monitoring agency monitoring the u�lisa�on of proceeds of a public or rights issue, and making appropriate recommenda�ons to the Board to take up steps in this ma�er;

7. Review and monitor the auditor's independence and performance, and effec�veness of audit process;

8. Approval or any subsequent modifica�on of transac�ons of the company with related par�es;

9. Scru�ny of inter-corporate loans and investments;

10. Valua�on of undertakings or assets of the company, wherever it is necessary;

11. Evalua�on of internal financial controls and risk management systems;

12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;

13. Reviewing the adequacy of internal audit func�on, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, repor�ng structure coverage and frequency of internal audit;

14. Discussion with internal auditors of any significant findings and follow up there on;

15. Reviewing the findings of any internal inves�ga�ons by the internal auditors into ma�ers where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and repor�ng the ma�er to the board;

16. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

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17. To look into the reasons for substan�al defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;

18. To review the func�oning of the Whistle Blower mechanism;

19. Approval of appointment of CFO (i.e., the whole-�me Finance Director or any other person heading the finance func�on or discharging that func�on) a�er assessing the qualifica�ons, experience and background, etc. of the candidate;

20. Carrying out any other func�on as is men�oned in the terms of reference of the Audit Commi�ee.

st During the financial year ended on 31 March 2018, 6 (Six) mee�ngs of the Audit Commi�ee were held.

The dates on which the mee�ngs of the Audit Commi�ee were held, are as under:

th th th 30 May 2017 11 August 2017 14 September 2017

th th th 8 December 2017 7 February 2018 15 March 2018

The composi�on of the Audit Commi�ee and the details of mee�ngs a�ended by the Directors are given below:

The Audit Commi�ee invites such Execu�ves as it considers appropriate to be present at its mee�ngs. The Chief Financial Officer and Company Secretary a�ended all the mee�ngs. The Statutory Auditors are invited to the mee�ngs in which Quarterly/Annual Accounts are considered. The Internal Auditors are also invited to the mee�ngs in which Internal Audit Reports are discussed. The Company Secretary acts as the Secretary of the Commi�ee.

2. NOMINATION AND REMUNERATION COMMITTEE

The role of the Nomina�on and Remunera�on commi�ee as set out in SEBI (LODR) Regula�ons, 2015. Brief descrip�on of terms of reference include the following:

1. Formula�on of the criteria for determining qualifica�ons, posi�ve a�ributes and independence of a director and recommend to the Board a policy, rela�ng to the remunera�on of the directors, key managerial personnel and other employees;

2. Formula�on of criteria for evalua�on of Independent Directors and the Board;

3. Devising a policy on Board diversity;

4. Iden�fying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal.

5. whether to extend or con�nue the term of appointment of the independent director, on the basis of the report of performance evalua�on of independent directors.

A�endance of Members at Mee�ngs of the Audit Commi�ee

Name of the Director Category Designa�on Mee�ngs a�ended

Mr. Jagesh Khaitan Independent Non Execu�ve Chairman 6

Mr. Anil Khanna Independent Non Execu�ve Member 6

Mrs. Ranjana Agarwal Independent Non Execu�ve Member 4

Mr. Yashovardhan Saboo Promoter Execu�ve Member 6

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61

stDuring the financial year ended on 31 March, 2018, 2 (two) mee�ngs of the Nomina�on and Remunera�on th th

Commi�ee were held on 30 May 2017 and 11 August 2017

stThe composi�on of the Nomina�on and Remunera�on Commi�ee as on 31 March 2018 is as given below:

Performance evalua�on criteria for Independent Directors-

The Nomina�on and Remunera�on Commi�ee has laid down the criteria for performance evalua�on of Independent Directors which are as under-

l Frequency of mee�ngs a�ended

l Timeliness of circula�ng Agenda for mee�ngs and descrip�veness

l Quality, quan�ty and �meliness of flow of informa�on to the Board

l Promptness with which Minutes of the mee�ngs are drawn and circulated

l Opportunity to discuss ma�ers of cri�cal importance, before decisions are made

l Familiarity with the objects, opera�ons and other func�ons of the company

l Importance given to Internal Audit Reports, Management responses and steps towards improvement

l Avoidance of conflict of interest

l Exercise of fiscal oversight and monitoring financial performance

l Level of monitoring of Corporate Governance Regula�ons and compliance

l Adherence to Code of Conduct and Business ethics by directors individually and collec�vely

l Monitoring of Regulatory compliances and risk assessment

l Review of Internal Control Systems

l Performance of the Chairperson of the company including leadership quali�es.

l Performance of the Whole �me Director

l Overall performance of the Board/ Commi�ees.

The members of the Board jointly discuss, evaluate and iden�fy the areas for improving the performance and effec�veness of the Board.

Remunera�on of Director

There was no pecuniary rela�onship or transac�on between the Non-Execu�ve Directors and the company during the financial year 2017-18.

A�endance of Members at Mee�ngs of the Nomina�on and Remunera�on Commi�ee

Name of the Director Category Designa�on Mee�ngs a�ended

Mr. Jagesh Khaitan Independent Non Execu�ve Chairman 2

Mrs. Ranjana Agarwal Independent Non Execu�ve Member 2

Mr. Praveen Gupta Independent Non Execu�ve Member 1

Mr. Sanjiv Sachar Member 2

Independent Non Execu�ve

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62

Criteria of making payments to Non-Execu�ve Directors

The remunera�on of Non Execu�ve Directors shall be finalised considering the following:

a) They will be en�tled to receive remunera�on by way of si�ng fees for a�ending mee�ngs of the Board or its Commi�ees at rates within the limits prescribed under the Companies Act, 2013 and rules made thereunder.

b) Non Execu�ve Directors do not par�cipate in Board discussions which relate to their own remunera�on.

c) They receive reimbursement of reasonable expenses incurred in a�ending the Board, Commi�ee and other adhoc mee�ngs.

d) Remunera�on is paid subject to deduc�on of Income Tax at source and payment of applicable Service Tax.

During the year under review, the Non Execu�ve Directors of the Company were paid si�ng fees as under (including fees paid for Commi�ee mee�ngs):

Name of the Director Si�ng Fees paid (Gross) (₹)

Mr. Anil Khanna 125,000

Mr. Sanjiv Sachar 85,000

Mr. Jagesh Khaitan 140,000

Mr. Praveen Gupta 80,000

Mr. Jai Vardhan Saboo 15,000

Mrs. Ranjana Agarwal 95,000

Total 540,000

Remunera�on of the Execu�ve Directors

The Company has framed a Remunera�on Policy, the brief terms of which are given hereunder:-

a) At the �me of appointment or re-appointment, the Chairman, Vice Chairman, Managing Director and Whole Time Director shall be paid such remunera�on as may be mutually agreed between the Company (which includes the Nomina�on & Remunera�on Commi�ee and the Board of Directors) and the respec�ve Director within the overall limits as prescribed under the Companies Act, 2013 and rules made thereunder.

b) The remunera�on shall be subject to the approval of the Members of the Company in General Mee�ng.

c) The remunera�on of the above said directors is broadly divided into fixed and variable component whereas the remunera�on of Chairman consists of fixed components only.

d) The remunera�on of the directors may also include Employee Stock Op�on Plans (ESOPs) as per the provisions of applicable laws.

e) The fixed compensa�on shall comprise salary, allowances, perquisites, ameni�es and re�rement benefits. The variable component shall comprise of individual and company performance bonus.

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63

f) In determining the remunera�on (including the fixed increment and performance bonus) the Nomina�on & Remunera�on Commi�ee shall consider the following:

- The rela�onship of remunera�on and performance benchmarks is clear;

- Balance between fixed and incen�ve pay reflec�ng short and long-term performance objec�ves appropriate to the working of the company and its goals;

- Responsibility required to be shouldered by the above said Directors and the industry benchmarks and the current trends;

- The Company's performance vis-à-vis the annual budget achievement and individual performance vis- à-vis the Key Responsibility Areas (KRAs) / Key Performance Indicators (KPIs).

g) Execu�ve Directors are not en�tled to si�ng fees for a�ending mee�ng of directors.

The Nomina�on and Remunera�on Commi�ee will consider the performance against measurable parameters and also have subjec�ve assessment of individual while fixa�on / revisions of remunera�on.

Details of remunera�on paid/payable to the Chairman & Managing Director and Whole Time Director-cum-CFO st

during the financial year ended on 31 March, 2018 are as follows:

a. The Salary includes Performance incen�ve also.

b. The Company has not granted any Stock Op�ons to its Directors or Employees during Financial Year 2017-18.

3. STAKEHOLDERS' RELATIONSHIP COMMITTEE

The Stakeholders' Rela�onship Commi�ee has been cons�tuted to specifically look into transfer / transmission/demat/remat of shares, issue of duplicate/split/consolida�on of share cer�ficates, no�ces and to a�end shareholder's complaints on SCORES system of SEBI or otherwise etc.

Mr. Anil Khanna, Independent Non Execu�ve Director is Chairman of the commi�ee. The present composi�on of Stakeholders' Rela�onship Commi�ee is as under:

Name Category Designa�on

Mr. Anil Khanna Independent Non Execu�ve Director Chairman

Mr. Yashovardhan Saboo Whole �me Director Member

Mr. Sanjeev Masown Chief Financial Officer Member

This Commi�ee meets fortnightly or as may be required. The Company Secretary of the Company is authorized to authen�cate the transfers/transmissions/issue of duplicate share cer�ficates etc. All requests for dematerializa�on of shares are processed and confirmed by M/s Karvy Computershare Private Limited, Registrars and Share Transfer Agents of the Company.

Name Salary Perquisites & Allowances

Bonus paid/provided in 2017-18

Total

Mr. Yashovardhan Saboo 11918669 482205 -- 12400874

Mr. Sanjeev Kumar Masown 6370359 54345 -- 6424704

(Amount in ₹)

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64

Shareholders'/Investors' complaints

stComplaints pending as on 1 April, 2017 nilst stDuring the period from 1 April, 2017 to 31 March, 2018 19

stComplaints disposed off during the year ended 31 March, 2018 19st

Complaints unresolved to the sa�sfac�on of shareholders as on 31 March, 2018 nil

4. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

In order to comply with the provisions of Sec�on 135 of the Companies Act, 2013 read with rules made th

thereunder, the Board of Directors have cons�tuted a 'Corporate Social Responsibility Commi�ee w. e. f. 27 May, 2014 with the following directors:

Name Designa�on

Mr. R. K.Saboo Chairman

Mr. Yashovardhan Saboo Member

Mrs. Ranjana Agarwal Member

Mr. Jagesh Khaitan Member

th thDuring the year under review, two mee�ngs were held on 30 May 2017 and 7 February 2018.

The abovesaid policy is available at the link of the website of h�p://www.kddl.com/html/company_policy.htmlthe Company.

SUBSIDIARY COMPANIES

The financials of the subsidiary companies viz M/s Ethos Limited, Mahen Distribu�ons Ltd , Pylania S.A, Satva Jewellery and Design Limited & Kamla Interna�onal Holdings S.A. have been duly reviewed by the audit commi�ee and Board of Directors of the company. The KDDL Board is also periodically reviewing all significant transac�ons entered into by the subsidiary companies.

The company has formulated a policy for determining the material subsidiaries and the details of such policy is available in the website of the company at web link h�p//www.kddl.com/html/companypolicy.html

IV. SHAREHOLDERS INFORMATION

General Body Mee�ngs

(I) Loca�on, date and �me where last three Annual General Mee�ngs were held along with the special resolu�ons passed, are as follows:

Financial year

Details of Loca�on Date Time Special resolu�ons passed

2016-17 Hotel Timber Trail Resorts, Parwanoo -173 220 (HP)

11th

August 2017

12.30 p.m.

A) To amend Ar�cle No. 114 of Ar�cles of Associa�on B) To insert new Ar�cle 114-A in Ar�cles of Associa�on C) To approve re-appointment and remunera�on of Mr. Yashovardhan Saboo as Chairman & Managing Director

D) To authorize investment in subsidiary company

2015-16

Hotel Timber Trail Resorts, Parwanoo -173 220 (HP)

12th

August

2016

12.30 p.m.

Appointment of Mr. Sanjeev Kumar Masown as Whole Time Director-cum-Chief Financial Officer

2014-15

Hotel Timber Trail Resorts, Parwanoo -173 220 (HP)

24th

August

2015

12.30

p.m.

Issue and allot 1008400 equity shares on preferen�al basis to SAIF India V Holdings Limited.

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http://www.kddl.com/html/company_policy.html

V. DISCLOSURES

During the year, there were no materially significant transac�ons with related par�es that may have poten�al conflict with the interests of the Company in large. The transac�ons with related par�es, as per requirements of Accoun�ng Standard 18, are disclosed in the Balance Sheet. Also, there has not been any non-compliance by the Company in this regard.

The policy on dealing with related party transac�ons as approved by the Board is posted on the company's website.

No penal�es or strictures were imposed by the Stock Exchange, SEBI or any other Statutory Authority on any ma�er related to Capital Markets during the last three years.

Chief Execu�ve Officer (CEO) and Chief Financial Officer (CFO) have cer�fied to the Board in accordance with stSEBI(LODR) Regula�ons, 2015 pertaining to CEO/CFO cer�fica�on for the financial year ended 31 March, 2018.

The Company follows Accoun�ng Standards issued by the Ins�tute of Chartered Accountants of India in the prepara�on of financial statements and the Company has not adopted a treatment different from that prescribed in the Accoun�ng Standards or revised relevant schedule of the Companies Act, 2013 read with rules made there under.

The Company has not adopted any discre�onary requirements as stated in Schedule II part E of SEBI (LODR) Regula�ons, 2015.

The Company has framed a Whistle Blower Policy, the details of which are available on the company's website.

The Management affirms that no person has been denied access to the Audit Commi�ee. All details rela�ng to financial and commercial transac�ons where Directors may have pecuniary interest are provided to the Board, and the interested Directors neither par�cipate in the discussion, nor do they vote on such ma�ers. In ma�ers other than those with pecuniary interests, the Directors are considered to be interested to the extent of their shareholding in the Company and following is the status of their shareholding as on the date of this Report:

Name of the Director No. of equity shares held as on 31�� March, 2018

Mr. Yashovardhan Saboo 1547265

Mr. Jagesh Khaitan 466

Mr. Anil Khanna 4283

Mr. Jai Vardhan Saboo Nil

Mrs. Ranjana Agarwal Nil

Mr. Sanjeev Kumar Masown 2000

Mr. Vishal Sa�nder Sood Nil

Mr. Sanjiv Sachar 1400

(ii) One Extra –Ordinary General Mee�ng of the shareholders of the Company was held during the year in which following resolu�ons were passed with overwhelming majority:-

Details of Loca�on Date Time Special resolu�ons passed

PHD House, PHD Chamber of Commerce & Industry, Sector 31, Chandigarh

7th

February 2018 10:00 a.m. 1. To approve scheme of amalgama�on of wholly owned subsidiary with the company

2. Approval of material related party transac�ons

At present, there is no special resolu�on proposed to be conducted through postal ballot.

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66

In compliance to various Provisions under SEBI(LODR) Regula�ons, 2015, the company has also framed various polices during the year as under:-

a) Policy on Preserva�on of Documents;b) Policy for determina�on of materiality of events or informa�on;c) Policy for determina�on of Material subsidiaries;d) Corporate social responsibility policy;

VI.� MEANS OF COMMUNICATION

IX. GENERAL SHAREHOLDER INFORMATION

(a) Annual General Mee�ng

� Date : Saturday, 14th July 2018 Venue : Hotel Timber Trail Resorts, Parwanoo, Dis�. Solan (H.P.) - 173220

Time : 12.30 p.m.

(b) Financial Year

st st� Financial year� � � : � 1 April to 31 March

st� For the financial year ended 31 March, 2018, results were announced on:

th th· 30 June, 2017 � :� 14 September 2017th th

· 30 September, 2017� :� 8 December 2017st th· 31 December, 2017 : 7 February 2018st· 31 March, 2018 : : 14�� May 2018

stFor the year ending 31 March, 2019, the tenta�ve dates for announcement of the results:th

· 30 June, 2018 � :� Second Week of August 2018th· 30 September, 2018� :� Second week of November, 2018st

· 31 December, 2018� :� Second week of February, 2019st

· 31 March, 2019� :� Fourth week of May, 2019

Quarterly/Half yearly report sent to each

shareholder’s residence

No. The financial results are published in the newspapers as requir ed under the Lis�ng Agreement.

Newspapers in which quarterly results are published Financial Express (English)/Jan Sa�a (Hindi)

Any website where results or official news are displayed

Yes, www.kddl.com

Whether it also displays official news releases

Yes

The presenta�ons made to ins�tu�onal investors or to the analysts

Yes

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67

� Date of Book Closure � �Book Closure� � � : 7�� July 2018 to 14�� July 2018 (both days inclusive)

(c) Dividend Payment Date : with in 30 days from the date of Declara�on at AGM

(d)� Name of Stock Exchanges at which the securi�es are listed

The equity share capital of the company has been listed at Na�onal Stock Exchange of India Limited (NSE), and BSE Limited. The company has paid Annual Lis�ng Fee for the year 2018-19 to both exchanges, i.e. Na�onal Stock Exchange and BSE.

(e)� Stock Code�� NSE - KDDL� BSE Limited – 532054

Month Quote at BSE (Amount in Rs.) BSE Sensex Close

Quote at NSE( Amount in Rs.) Ni�y 50 Sensex

Close High Low High Low

April, 2017 228.75 188.10 29918.40 229.90 186.60 9304.05

May, 2017 225.00 177.15 31145.80 225.50 178.00 9621.25

June, 2017 210.30 182.00 30921.61 214.00 182.00 9520.90

July, 2017 208.00 184.55 32514.94 210.00 182.80 10077.10

August, 2017 209.80 176.00 31730.49 210.40 178.60 9917.90

September, 2017 232.90 183.00 31283.72 233.10 183.00 9788.60

October, 2017 271.95 190.60 33213.13 271.95 200.00 10335.30

November, 2017 350.65 229.00 33149.35 355.00 226.50 10226.55

December, 2017 356.15 282.05 34056.83 350.95 282.15 10530.70

January, 2018 350.00 321.00 35965.02 350.00 319.00 11027.70

February, 2018 407.00 299.75 34184.04 409.40 293.90 10492.85

March, 2018 400.85 353.25 32968.68 395.00 355.55 10113.70

(f)� Market Price Data & performance in comparison with Sensex

(g)� Registrar and Share Transfer Agent

M/s Karvy Computershare Private Limited, Hyderabad are the Registrar and Share Transfer Agent of the Company for handling the share transfer work both in physical and electronic form. All correspondences rela�ng to share transfer, transmission, dematerializa�on and rematerialisa�on can be made at the following address:

Karvy Computershare Private Limited(CIN – U74140TG2003PTC041636)UNIT: KDDL LIMITED

'Karvy Selenium Tower B', Plot 31-32, Financial District, Nanakramguda, Gachibowli, Hyderabad – 500 032 Ph : +91 040 67161516/1518Fax: +91-40 23420818

Website: www.karvy.comContact Person: Mr. Srikrishna Pemmaraju/Mr. Suresh Babu D.

KDDL Limited

68

http://www.karvy.com

(h)� Share Transfer System

The Company has cons�tuted Stakeholders' Rela�onship Commi�ee to specifically look into transfer/demat/remat of shares, issue of duplicate/split/consolida�on of share cer�ficates, no�ces, the redressal of Investors' complaints etc. The Commi�ee meets on an average once in a fortnight. The list of valid transfers and objec�ons, requests for split up/consolida�on/duplicate/dematerializa�on, if any, are placed before the Commi�ee for its approval and confirma�on.

(i) Distribu�on of shareholding (as on 31�� March 2018)

S. No

Category

No. of Cases

% of Cases

Amount

% of Amount

1

1

-

422 6

84.13

5264510.00

4.81

2

5001

375

7.47

2899550.00

2.65

3

10001

179

3.56

2686710.00

2.45

4 20001 77 1.53 1974540.00 1.80

5 30001 34 0.68 1200900.00 1.10

6 40001 - 21 0.42 989900.00 0.90

7 50001 48 0.96 3500150.00 3.20

8 100001 And Above 63 1.25 91011660.00 83.09

Total: 5023 100.00 109527920.00 100.00

S

-

-

-

-

-

0.

50001 -

5000

10000

20000

30000

40000

50000

100000

SHARE HOLDING PATTERN AS ON 31�� March, 2018

S.No Descrip�on No. of Cases Total Shares % Equity

1 MUTUAL FUNDS 1 2900 0.03

2 FOREIGN INSTITUTIONAL INVESTORS 1 1008400 9.21

3 ALTERNATIVE INVESTMENT FUND 1 74580 0.68 4 RESIDENT INDIVIDUALS 4640 2434727 22.23 5

PROMOTERS

19

4882893

44.58

6

EMPLOYEES

5

8695

0.08

7

NON RESIDENT INDIANS

40

86820

0.79

8

PROMOTERS BODIES CORPORATE 2

31404

0.29

9

CLEARING MEMBERS

11

475

0.00

10

FOREIGN PORTFOLIO INVESTORS 7

778905

7.11

11

BANKS

1

50

0.00

12

DIRECTORS

3

16810

0.15

13 FOREIGN PROMOTER BODIES CORPORATES

1 60000 0.55

KDDL Limited

69

14

NON RESIDENT INDIAN NON

REPATRIABLE

32

39477

0.36

15

BODIES CORPORATES

130

1391226

12.70

16

NBFC

2

2389

0.02

17

DIRECTORS AND THEIR RELATIVES 7

27629

0.25

18

H U F

119

65412

0.60

19

FOREIGN CORPORATE BODIES 1

40000

0.37

TOTAL 5023 10952792 100.00

(j)� Dematerializa�on of shares and liquidityst As on 31 March, 2018, 10562464 equity shares equivalent to about 96% of the Company's paid up equity

capital is held in dematerialized form with NSDL and CDSL. Trading in equity shares of the Company is th

permi�ed only in dematerialized form w.e.f. 24 May, 2001 as per the no�fica�on issued by the Securi�es and Exchange Board of India.

The ISIN (Interna�onal Securi�es Iden�fica�on Number) of the Company is INE291D01011.

(k) Unclaimed dividend

Pursuant to the provisions of sec�on 124 of the Companies Act, 2013 and rules made thereunder, the amount of dividend which remains unclaimed for a period of seven years from the date of transfer to unclaimed/unpaid dividend account would be transferred to the “Investor Educa�on and Protec�on Fund” and the shareholders would not be able to make any claims to the amount of dividend so transferred to the Fund. The unclaimed dividend for the years �ll 2007-08 has already been transferred to the fund. As such, shareholders who have not yet encashed their dividend warrants are requested in their own interest to write to the Company immediately for claiming outstanding dividends declared by the Company during the years 2010-11 onwards.

The schedule for transfer of dividend for the following years remaining unclaimed for seven years from the date of declara�on and which are required to be transferred by the Company to the said account is tabled below:

Year Dividend No. Dividend unclaimed (₹) as on 31�� March, 2018

Date of declara�on Due date for transfer

2010-11 18 375883.00 15.09.2011 21.10.2018

2011-12 19 406305.00 17.09.2012 23.10.2019

2012-13 20 155736.00 09.09.2013 15.10.2020

2013-14 21 234899.00 06.08.2014 12.09.2021 2014-15

22

431028.00

24.08.2015

30.09.2022

2015-16

23

362524.75

11.03.2016

17.04.2023

2016-17

24

427412.04

11.08.2016

17.09.2024

KDDL Limited

70

(j)� Dematerializa�on of shares and liquidity

(I) Outstanding GDRs/ADRs/Warrants or any conver�ble instruments, conversion date and likely impact on equity

There are no outstanding GDRs/ADRs/Warrants or any conver�ble instruments issued by the Company during the year.

(m) � Commodity price risk or foreign exchange risk and hedging ac�vi�es

(n)� Plant/Business Loca�ons

Dial Units 1. Plot No. 3, Sector III, Parwanoo - 173220 (H.P.)

2. Haibatpur Road, Saddomajra, Derabassi-140507 (Punjab)

Assembly Units 1. Village Dhana, Bagbania, P.O Manpura, Tehsil Baddi, Dis�. Solan-173205 (H.P.)

Hands Unit 1. 296- th97, 5 Main, Phase IV, Peenya Industrial Area,

2. 408, nd2 thFloor, 4 thMain, 11 Cross, Peenya Industrial Area, Bangalore - 560058 (Karnataka)

Packaging Unit 1. Plot No. 9, Sector V, Parwanoo - 173220 (H.P.)

Precision Stamping Unit -EIGEN

1. th408, 4 th

Main, 11 Cross, Peenya Industrial Area,

2. Plot No 9-B, Chokkasandra, Peenya Industrial Area, Bangalore, - 560058(Karnataka)

(o) Address for correspondence

Shareholders are requested to contact the following:-�

Mr. R.K.SoodCompany Secretary and Compliance Officer KDDL LimitedCorporate Office: 'Kamla Centre', SCO 88-89Sector 8-C, Chandigarh-160 009Tel: 0172-2544378,Fax: 0172- 2548302

Website: www.kddl.comEmail: [email protected]

Other Disclosures

(i) During the financial year ended 31�� March, 2018 there were no materially significant related party transac�ons that may have poten�al conflict with the interests of the Company at large.

(ii) Except se�lement amount of Rs. 2,31,750/- towards delayed compliance of regula�on 7(3) of SAST Regula�ons, 1997 paid on October 17, 2016, there was no other penalty imposed, nor were any strictures passed by Stock Exchange or SEBI or any statutory authority on any capital market related ma�ers during the last three years.

(iii) The Company has established vigil mechanism policy and Whistle Blower policy. All the personnel of the company have the access to the Audit Commi�ee.

KDDL Limited

71

Bangalore - 560058 (Karnataka)

Bangalore - 560058 (Karnataka)

(iv) The Company has complied with the mandatory requirements of the Lis�ng Regula�on. The Company has adopted various non-mandatory requirements as well, as discussed under relevant headings.

(v) The Company has framed a Material Subsidiary Policy and the same is placed on the Company's website and the web link for the same

(vi) The company has framed Related Party Transac�on Policy and is placed on the Company's website and the web link for the same is

(vii) During the financial year ended 31�� March, 2018 the company did not engage in commodity hedging ac�vi�es.

There has been no instance of non-compliance of any requirement of Corporate Governance Report.

ADOPTION OF NON-MANDATORY REQUIREMENTS

I. The Board

The company does not have a Non Execu�ve Chairman.

II. Shareholder Rights

The Half yearly financial results are forwarded to the Stock Exchanges and uploaded on the website of the Company.

III. Audit Qualifica�ons

There was no audit qualifica�on in the Auditors' Report on the Company's financial statements during the financial year under review.

IV. Separate posts of Chairman and CEO

Mr. Yashovardhan Saboo is Chairman & Managing Director of the company.

V. Repor�ng of Internal Auditor

The Internal Auditor of the Company reports directly to the audit commi�ee.

The Company has fully complied with the applicable requirement specified in Reg. 17 to 27 and clause (b) to (i) of sub-regula�on (2) of regula�on 46.

Declara�on by the CEO under SEBI(LODR) Regula�ons, 2015 regarding adherence to the Code of Conduct

In accordance with regula�on 34(3) of the Securi�es & Exchange Board of India( Lis�ng obliga�ons and disclosure requirement) regula�ons, 2015, I hereby confirm that, all Directors and the Senior Management personnel of the

stCompany have affirmed compliance to the KDDL's respec�ve Code of Conduct, for the financial year ended 31 March, 2018.

For KDDL Limited

Yashovardhan SabooChairman & Managing Director

KDDL Limited

72

Cer�ficate on Corporate Governance under SEBI (LODR) Regula�ons, 2015

To the Members ofKDDL Limited

We have examined the compliance of condi�ons of corporate governance by KDDL Limited ("the Company"), for the year ended on 31 March 2018, as s�pulated in Chapter lV of Securi�es & Exchange Board of India (Lis�ng Obliga�ons and Disclosure Requirements) regula�ons, 2015.

The compliance of condi�ons of corporate governance is the responsibility of the management. Our examina�on was limited to a review of the procedures and implementa�on thereof, adopted by the Company for ensuing the compliance of the condi�ons of the Corporate Governance. lt is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our informa�on and according to the explana�ons given to us, we cer�fy that the Company has complied with the condi�ons of Corporate Governance as s�pulated in Securi�es & Exchange Board of India (Lis�ng Obliga�ons and Disclosure Requirements) regula�ons, 2015.

We further state that this cer�ficate is neither an assurance as to the future viability of the Company nor the efficiency or effec�veness with which the management has conducted the affairs of the Company.

KDDL Limited

73

For M.R. CHECHI & ASSOCIATESCOMPANY SECRETARIES

Date: 14/05/2018 Place: Chandigarh

MAST RAM, FCSMembership No: 3823

Cer�ficate of Prac�ce No: 2906

Independent Auditor's Report

To the Members of KDDL Limited

1. Report on Audit of the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of KDDL Limited ('the Company'), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss, the Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and summary of the significant accoun�ng policies and other explanatory informa�on (hereina�er referred to as 'the standalone Ind AS financial statements').

2. Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the ma�ers stated in Sec�on 134(5) of the Companies Act, 2013 (“the Act”) with respect to the prepara�on of these standalone Ind AS financial statements that give a true and fair view of the state of affairs, profit or loss and including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accoun�ng principles generally accepted in India, including the Indian Accoun�ng Standards ('Ind AS') prescribed under Sec�on 133 of the Act.

This responsibility also includes maintenance of adequate accoun�ng records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preven�ng and detec�ng frauds and other irregulari�es; selec�on and applica�on of appropriate accoun�ng policies; making judgments and es�mates that are reasonable and prudent; and design, implementa�on and maintenance of adequate internal financial controls, that were opera�ng effec�vely for ensuring the accuracy and completeness of the accoun�ng records, relevant to the prepara�on and presenta�on of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company's ability to con�nue as a going concern, disclosing, as applicable, ma�ers related to going concern and using the going concern basis of accoun�ng unless management either intends to liquidate the Company or to cease opera�ons, or has no realis�c alterna�ve but to do so.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accoun�ng and audi�ng standards and ma�ers which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Audi�ng specified under Sec�on 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whetherdue to fraud or error. In making those risk assessments, the auditor considers internal financialcontrol relevant to the Company's prepara�on of the standalone Ind AS financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances. An audit also includes evalua�ng the appropriateness of the accoun�ng policies used and the reasonableness of the accoun�ng es�mates made by the Company's Directors, as well as evalua�ng the overall presenta�on of the standalone Ind AS financial statements.

We are also responsible to conclude on the appropriateness of management's use of the going concern basis

KDDL Limited

74

75

of accoun�ng and, based on the audit evidence obtained, whether a material uncertainty exists related to events or condi�ons that may cast significant doubt on the en�ty's ability to con�nue as a going concern. If we conclude that a material uncertainty exists, we are required to draw a�en�on in the auditor's report to the related disclosures in the standalone Ind AS financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor's report. However, future events or condi�ons may cause an en�ty to cease to con�nue as a going concern.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

4. Opinion

In our opinion and to the best of our informa�on and according to the explana�ons given to us, the aforesaid

standalone Ind AS financial statements give the informa�on required by the Act in the manner so required and

give a true and fair view in conformity with the accoun�ng principles generally accepted inIndia of the state of

affairs of the Company as at 31 March 2018 and its profit and including other comprehensive income, changes

in equity and its cash flows for the year ended on that date.

5. Other ma�er

The compara�ve financial informa�on of the Company for the year ended 31 March 2017 and the transi�on

date opening Balance Sheet as at 1 April 2016 included in these standaloneInd AS financial statements, are

based on the previously issued statutory financial statements prepared in accordance with the Companies

(Accoun�ng Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended31

March 2017 and 31 March 2016 dated 30 May 2017 and 30 May 2016 respec�vely expressed an unmodified

opinion on those standalone financial statements, as adjusted for the differences in the accoun�ng principles

adopted by the Company on transi�on to the Ind AS, which have been audited by us.

Our opinion is not modified in respect of the above ma�er.

6. Report on Other Legal and Regulatory Requirements

(i) As required by the Companies (Auditor's Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Sec�on 143 (11) of the Act, we give in the Annexure 'A', a statement on the ma�ers specified in paragraphs 3 and 4 of the Order.

(ii) As required by Sec�on 143 (3) of the Act, we report that:

a) We have sought and obtained all the informa�on and explana�ons which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examina�on of those books.

c) The Balance Sheet, the Statement of Profit and Loss, the Statement of Changes in Equity and theCash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Ind As specified under Sec�on 133 of the Act.

e) On the basis of the wri�en representa�ons received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Sec�on 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference to Standalone Ind AS financial statements of the Company and the opera�ng effec�veness of such controls, refer to our separate report in Annexure 'B'.

g) With respect to the other ma�ers to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our informa�on and according to the explana�ons given to us:

KDDL Limited

76

(i) The Company has disclosed the impact of pending li�ga�ons on its financial posi�on in its standalone Ind AS financial statements. Also, refer to Note 37 to the standalone Ind AS financial statements.

(ii) The Company did not have any long-term contracts including deriva�ve contracts for which there were any material foreseeable losses.

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Educa�on and

Protec�on Fund by the Company.

(iv) The disclosures in the standalone Ind AS financial statements regarding holdings as well as dealings in

specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made

since they do not pertain to the financial year ended 31 March 2018. However, amounts as appearing in the

audited Standalone financial statements for the year ended31 March 2017 have been disclosed. Also, refer to

Note 42 to the standalone Ind AS financial statements.

For B S R & Co. LLP Chartered Accountants Firm Registra�on No.: 101248W/W-100022

Pravin Tulsyan Place: Gurugram, Haryana Partner Date:14 May 2018 Membership No.: 108044

KDDL Limited

77

Annexure 'A' referred to in paragraph 6(I) of the Independent Auditors' Report to the

Members of the Company for the year ended 31 March 2018, we report that:

(i) (a) The Company has maintained proper records showing full par�culars, including quan�ta�ve details and

situa�on of fixed assets.

(b) According to the informa�on and explana�ons given to us, the Company has a regular programme of physical verifica�on of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year. In our opinion, this periodicity of physical verifica�on is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, the discrepancies no�ced on such verifica�on were not material and have been properly adjusted in the books of account.

(c) According to the informa�on and explana�ons given to us and on the basis of our examina�on of the records of the Company, the �tle deeds of immovable proper�es are held in the name of the Company except for the following which are not held in the name of the Company:

(ii) According to the informa�on and explana�on given to us, the inventories, except goods-in-transit and stocks

lying with third par�es, have been physically verified by the management during the year. In our opinion, the

frequency of such verifica�on is reasonable. For stocks lying with third par�es at the year-end, wri�en

confirma�ons have been obtained. As informed to us, the discrepancies no�ced on verifica�on between the

physical stocks and the book records were not material and have been properly adjusted in the books of

account.

(iii) According to the informa�on and explana�ons given to us, the Company has granted loans, secured or

unsecured, to companies covered in the Register maintained under Sec�on 189 of the Act, in respect of

which:

(a) The terms and condi�ons of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company's interest.

(b) The schedule of repayment of principal and payment of interest has been s�pulated and repayments or receipts of principal amounts and interest have been regular as per s�pula�ons.

(c) There is no amount overdue for more than 90 days at the balance sheet date.

The Company has not granted loans, secured or unsecured, to limited liability partnership and other par�es covered in the Register maintained under Sec�on 189 of the Act. Further, there are no firms required to be covered in the Register maintained under Sec�on 189 of the Act.

(iv) According to the informa�on and explana�ons given to us, in respect of loans, guarantees and investments

made by the Company, the provisions of sec�on 185 and 186 of the Act have been complied with.

(v) In our opinion and according to the informa�on and explana�ons given to us, the Company has complied with the provision of Sec�ons 73 to 76 or any other relevant provisions of the Act and the rules framed there under

KDDL Limited

Leasehold

where applicable, the direc�ves issued by the Reserve Bank of India as applicable with regard to deposits accepted from the public. As informed to us, there have been no proceedings before the Company Law Board or Na�onal Company Law Tribunal and Reserve Bank of India or any court or any other tribunal in this ma�er and no order has been passed by any of the aforesaid authori�es in this regard.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules

prescribed by the Central Government for maintenance of cost records under Sec�on 148(1) of the Act in

respect of its manufactured goods and are of the opinion that prima facie, the prescribed accounts and

records have been made and maintained. However, we have not carried out a detailed examina�on of the

records with a view to determine whether these are accurate or complete.

(vii) (a) According to the informa�on and explana�ons given to us and on the basis of our examina�on of the

records of the Company, amounts deducted / accrued in the books of account in respect of undisputed

statutory dues including Provident fund, Employees' State Insurance, Income-Tax, Sales Tax, Service Tax, Duty

of Excise, Duty of Customs, Cess, Value Added Tax and other statutory dueshave generally been regularly

deposited during the year with the appropriate authori�es, though there have been slight delays in a few

cases of Income tax and Professional tax.

According to the informa�on and explana�ons given to us, no undisputed amounts payable in respect of Provident fund, Employees' State Insurance, Income-Tax, Sales Tax, Service Tax, Duty of Excise, Duty of Customs, Value Added Tax and other material statutory dues were in arrears as at 31 March 2018 for a period of more than six months from the date they became payable.

(b) According to the informa�on and explana�ons given to us, there are no dues of Income-Tax, Sales Tax, Service Tax, Duty of Excise, Duty of Customs, Value Added Tax and cess which have not been deposited with the appropriate authori�es on account of any dispute, except as men�oned below:

78

KDDL Limited

Name of theStatute

Nature of Dues

Amount disputed*

Amountdeposited*

Period to which the amount relates

Forum where the dispute is pending

Finance Act, 1994

Service tax

42.64

-

October

2008-May 2013

Commissioner (Appeals)

Finance Act, 1994

Service tax

24.72

-

June 2013

–

Sept ember

2016


Finance Act, 1994

Service tax

9.56

-

June 2009 –

September 2013


Finance Act, 1994

Service tax

2.54

-

October 2013 –

August 2014


Finance Act, 1994

Service tax

2.69

-

September 2014 –

June

2015


Finance Act, 1994

Service tax

2.33

-

June 2015 –

June 2016 Commissioner (Appeals)

Income Tax Act, 1961

Income tax

40.46

40.46

FY 2003-04 Income Tax Appellate Tribunal, New Delhi

Income Tax Act, 1961

Income tax 132.03 - FY 2004-05 Income Tax Appellate Tribunal, New Delhi

79

KDDL Limited

(viii) According to the records of the Company examined by us and the informa�on and explana�ons given to us, the Company has not defaulted in repayment of loans or borrowings to its bankers or to any financial ins�tu�ons. The Company did not have any loans or borrowings from government and has not issued any debentures during the year.

(ix) According to the informa�on and explana�ons given to us and on the basis of our examina�on of the records

of the Company, the term loans taken during the year have been applied for the purposes for which they were

obtained. As informed to us, the Company has not raised any other moneys by way of ini�al public offer or

further public offer (including debt instruments).

(x) According to the informa�on and explana�ons given to us, no fraud by the Company or on the Company by its

officers or employees has been no�ced or reported during the course of our audit for the year.

(xi) According to the informa�on and explana�ons given to us and on the basis of our examina�on of the records

of the Company, the managerial remunera�on has been paid or provided by the Company in accordance with

the provision of sec�on 197 read with Schedule V of the Act.

(xii) According to the informa�on and explana�ons given to us, the Company is not a Nidhi Company. Accordingly,

paragraph 3 (xii) of the Order is not applicable.

(xiii) According to the informa�on and explana�ons given to us and on the basis of our examina�on of the records

of the Company, transac�ons with the related par�es are in compliance with sec�on 177 and 188 of the Act

where applicable and the details have been disclosed in the standalone Ind AS financial statements, as

required by the applicable accoun�ng standards.

* amount as per demand orders including interest and penalty, wherever indicated in the order.

80

KDDL Limited

(xiv) According to the informa�on and explana�ons given to us, the Company has duly complied with the

requirements of sec�on 42 of the Act, in respect of preferen�al allotment of shares made during the year. The

Company has neither made any private placement of shares nor issued any fully or partly conver�ble

debentures during the year. The proceeds from issue of equity shares amoun�ngto Rs. 225 lakhs, which has

been received during the year, have been used for the purposes for which the funds were raised.

(xv) According to the informa�on and explana�ons given to us, the Company has not entered into any non-cash

transac�ons with the directors or persons connected with them during the year. Accordingly, paragraph 3(xv)

of the Order is not applicable.

(xvi) According to the informa�on and explana�ons given to us, the Company is not required to be registered under

Sec�on 45-IA of the Reserve Bank of India Act, 1934.


Pravin Tulsyan Place: Gurugram, Haryana Partner Date: 14 May 2018 Membership No.: 108044

KDDL Limited

81

Annexure B referred to in paragraph 6(ii)(f) to the Independent Auditor's report to the Members of KDDL Limited being report on the Internal Financial Controls under Clause (i) of Sub-sec�on 3 of Sec�on 143 of the Act

We have audited the internal financial controls with reference to standalone Ind AS financial statements of KDDL Limited (“the Company”) as of 31 March 2018 in conjunc�on with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to financial statements criteria established by the Company considering the essen�al components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Repor�ng (the “Guidance Note”) issued by the Ins�tute of Chartered Accountants of India ('ICAI'). These responsibili�es include the design, implementa�on and maintenance of adequate internal financial controls that were opera�ng effec�vely for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the preven�on and detec�on of frauds and errors, the accuracy and completeness of the accoun�ng records, and the �mely prepara�on of reliable financial informa�on, as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Audi�ng, issued by ICAI and deemed to be prescribed under sec�on 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to Standalone Ind AS financial statements was established and maintained and if such controls operated effec�vely in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to standalone Ind AS financial statements and their opera�ng effec�veness. Our audit of internal financial controls with reference to standalone Ind AS financial statements included obtaining an understanding of internal financial controls with reference to standalone Ind AS financial statements, assessing the risk that a material weakness exists, and tes�ng and evalua�ng the design and opera�ng effec�veness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system with reference to standalone Ind AS financial statements.

Meaning of Internal Financial Controls with reference to standalone Ind AS Financial Statements

A company's internal financial control with reference to standalone Ind AS financial statements is a process designed to provide reasonable assurance regarding the reliability of financial repor�ng and the prepara�on of standalone Ind AS financial statements for external purposes in accordance with generally accepted accoun�ng principles. A company's internal financial control with reference to standalone Ind AS financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transac�ons and disposi�ons of the assets of the company; (2) provide reasonable assurance that transac�ons are recorded as necessary to permit prepara�on of standalone Ind AS financial statements in

82

KDDL Limited

accordance with generally accepted accoun�ng principles, and that receipts and expenditures of the company are being made only in accordance with authorisa�ons of management and directors of the company; and (3) provide reasonable assurance regarding preven�on or �mely detec�on of unauthorised acquisi�on, use, or disposi�on of the company's assets that could have a material effect on the standalone Ind AS financial statements.

Inherent Limita�ons of Internal Financial Controls with reference to standalone Ind AS Financial Statements

Because of the inherent limita�ons of internal financial controls with reference to standalone Ind AS financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projec�ons of any evalua�on of the internal financial controls with reference to standalone Ind AS financial statements to future periods are subject to the risk that the internal financial control with reference to standalone Ind AS financial statements may become inadequate because of changes in condi�ons, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to standalone Ind AS financial statements and such internal financial controls with reference to standalone Ind AS financial statements were opera�ng effec�vely as at 31 March 2018, based on the internal control with reference to standalone Ind AS financial statements criteria established by the Company considering the essen�al components of internal control stated in the Guidance Noteon Audit of Internal Financial Controls Over Financial Repor�ng issued by the Ins�tute of Chartered Accountants of India.


Pravin TulsyanPlace: Gurugram, Haryana PartnerDate: 14 May 2018 Membership No.: 108044

Balance sheet as at 31 March 2018(All amounts are in Indian Rupees Lakhs except for share data)

Note As at31 March 2018

As at31 March 2017

Assets Non-current assetsProperty, plant and equipment 3 6,044.44 6,093.50 5,795.65Capital work-in-progress 3 2,354.71 458.55 256.54Other intangible assets 4 56.07 66.28 97.84Financial assets- Investments 5 6,759.03 4,834.61 3,251.56- Loans 6 168.92 170.19 201.32Income tax assets (net) 7 499.73 499.73 425.20Other non-current assets 8 176.68 172.78 84.52Total non-current assets 16,059.58 12,295.64 10,112.63

Current assetsInventories 9 2,713.29 2,101.57 2,113.65 Financial assets- Trade receivables 10 2,856.17 2,119.79 1,992.16- Cash and cash equivalents 11 180.15 135.26 89.31- Other bank balances 12 672.96 858.06 432.67- Loans 6 177.38 153.39 126.53- Other financial assets 13 85.89 97.93 116.79Other current assets 14 1,031.92 540.06 603.71Total current assets 7,717.76 6,006.06 5,474.82Total assets 23,777.34 18,301.70 15,587.45

Equity and Liabili�esEquity Equity share capital 15 1,103.99 1,092.67 1,017.20Other equity 16 11,928.79 10,534.04 7,623.13Total equity 13,032.78 11,626.71 8,640.33

Liabili�esNon-current liabili�esFinancial liabili�es- Borrowings 17 3,338.19 2,177.45 1,844.76- Other financial liabili�es 18 12.46 16.31 6.77Provisions 19 193.18 158.41 281.80Deferred tax liabili�es (net) 20 378.31 456.44 403.31Total non-current liabili�es 3,922.14 2,808.61 2,536.64

Current liabili�esFinancial liabili�es - Borrowings 17 2,255.42 850.25 1,409.79- Trade payables 21 1,499.78 1,003.21 988.35- Other financial liabili�es 18 2,358.14 1,752.24 1,728.94Other current liabili�es 22 275.41 126.72 167.87Provisions 19 78.62 82.50 61.32Current tax liabili�es (net) 23 355.05 51.46 54.21Total current liabili�es 6,822.42 3,866.38 4,410.48Total liabili�es 10,744.56 6,674.99 6,947.12Total equity and liabili�es 23,777.34 18,301.70 15,587.45

Significant accoun�ng policies 2Notes to the standalone Ind AS financial statements 3-44

The accompanying notes form an integral part of the standalone Ind AS financial statements As per our report of even date a�ached For and on behalf of the Board of Directors of KDDL Limited

For B S R & Co. LLP Yashovardhan Saboo Sanjeev MasownChartered Accountants Chairman Chief Financial OfficerFirm registra�on no.:101248W/W-100022 and Managing Director and Whole �me Director DIN: 00012158 DIN: 03542390

Pravin Tulsyan Raman SoodPartner Company SecretaryMembership no. 108044 Membership no. F3722

Place : Gurugram, Haryana Place : Gurugram, Haryana Date : 14 May 2018 Date : 14 May 2018

KDDL Limited

As at1 April 2016

83

Statement of Profit and Loss for the year ended 31 March 2018(All amounts are in Indian Rupees Lakhs except for share data)

Note Year ended31 March 2018

Year ended31 March 2017

Revenue from opera�ons 24 14,724.28 13,061.34 Other income 25 479.98 272.37

Total income 15,204.26 13,333.71

ExpensesCost of materials consumed 26 3,690.63 2,928.50 Excise duty on sales 143.00 520.10 Changes in inventories of finished goods and work-in-progress 27 (326.14) (58.51)Employee benefits expense 28 4,264.65 3,942.92 Finance costs 29 483.22 551.57 Deprecia�on and amor�sa�on expense 30 740.17 725.14 Other expenses 31 4,208.79 3,568.73 Total expenses 13,204.32 12,178.45

Profit before income tax 1,999.94 1,155.26 Income tax expense: 32- Current tax - Current year 659.06 343.90 - Changes in es�mates related to previous year - 5.16 - Deferred tax (66.04) 54.54

Total income tax expense 593.02 403.60

Profit for the year 1,406.92 751.66

Other comprehensive income / (expense)Items that will not be reclassified to profit or loss Remeasurement of defined benefit liability / (asset) (42.21) (4.11)Income tax rela�ng to items that will not be reclassified to profit or loss: Income tax on remeasurement of defined benefit liability / (asset) 12.07 1.42 Other comprehensive income / (expense) for the year (net of income tax) (30.14) (2.69)Total comprehensive income / (expense) for the year 1,376.78 748.97

Earnings per share [nominal value of share Rs. 10 (previous year Rs. 10)] Basic (Rs.) 33 12.97 7.29 Diluted (Rs.) 12.96 7.28 Significant accoun�ng policies 2Notes to the standalone Ind AS financial statements 3-44

KDDL Limited

The accompanying notes form an integral part of the standalone Ind AS financial statements As per our report of even date a�ached For and on behalf of the Board of Directors of KDDL Limited




84

a. Equity share capital Note Balance as at 1 April 2016 15 1,017.20

Changes in equity share capital 75.47

during the year

Balance as at 31 March 2017 15 1,092.67

Changes in equity share capital 11.32

during the year

Balance as at 31 March 2018 1,103.99

b. Other equity

Balance as at 1 April 2016 4,664.06 1,776.20 21.58 1,161.29 - 7,623.13

Total comprehensive income for the year ended 31 March 2017 Profit for the year - - - 751.66 - 751.66 Other comprehensive income/ - - - (2.69) - (2.69) (expense) (net of tax)

Total comprehensive income for the year - - - 748.97 - 748.97

Transfer to general reserve - 200.00 - (200.00) - -

Op�ons forfeited during the year - - (3.28) - - (3.28) Issue of equity shares for cash 1,924.53 - - - - 1,924.53 Share issue expense (10.10) - - - - (10.10) Issue of share warrants - - - - 250.79 250.79 Dividend - - - - - - Corporate dividend tax - - - - - -

Balance as at 31 March 2017 6,578.49 1,976.20 18.30 1,710.26 250.79 10,534.04

Total comprehensive income for the year ended 31 March 2018 Profit for the year - - - 1,406.92 - 1,406.92 Other comprehensive income/ - - - (30.14) - (30.14 (expense) (net of tax)

Total comprehensive income for the year - - - 1,376.78 - 1,376.78

Statement of changes in equity for the year ended 31 March 2018 (All amounts are in Indian Rupees Lakhs except for share data)

Reserves and surplusMoney

received against shares

warrants

Total

Securi�es premium

General reserve

Employee stock op�ons outstanding

reserve

Retained earnings

85

KDDL Limited

Transfer to general reserve - 400.00 - (400.00) - - Op�ons forfeited during the year - - - - - - Issue of equity shares for cash 288.68 - - - (75.00) 213.68 Share issue expense - - - - - - Issue of share warrants - - - - - - Dividend - - - (162.60) - (162.60) Corporate dividend tax - - - (33.11) - (33.11)

Balance as at 31 March 2018 6,867.17 2,376.20 18.30 2,491.33 175.79 11,928.79

Significant accoun�ng policies 2

Notes to the standalone Ind AS financial statements 3-44

The acccompanying notes form an integral part of the standalone Ind AS financial statements As per our report of even date a�ached For and on behalf of the Board of Directors of KDDL Limited


Pravin Tulsyan Raman SoodPartner Company SecretaryMembership no. 108044 Membership No. F3722

Place : Gurugram, Haryana Place : Gurugram, HaryanaDate : 14 May 2018 Date : 14 May 2018

KDDL Limited

86

Reserves and surplusMoney

received against shares

warrants

Total

Securi�es premium

General reserve

Employee stock op�ons outstanding

reserve

Retained earnings

Statement of changes in equity for the year ended 31 March 2018 (All amounts are in Indian Rupees Lakhs except for share data)

Cash flow from opera�ng ac�vi�es Profit before income tax 1,999.94 1,155.26

Adjustments for : Deprecia�on and amor�sa�on expenses 740.17 725.14 Provisions no longer required wri�en back (26.26) (21.04) Net gain on sale of property, plant and equipment (160.61) (0.50) Interest income (83.50) (118.73) Dividend income (14.63) (24.05) Expense on employee stock op�on scheme - (3.28) Finance cost 483.22 552.05 Unrealised foreign exchange (gain) / loss (9.80) 8.64 Fixed assets wri�en off (net) 2.90 3.85 Expected credit loss on trade receivables - 5.97 Advances / deposits wri�en off 0.41 .80 Net change in fair value of financial assets (at FVTPL) - 2.62

Opera�ng cash flow before working capital changes 2,931.84 2,286.73

Changes in working capital: Decrease/ (Increase) in loans (13.29) 9.85 Decrease in other financial assets 11.98 20.13 (Increase)/ decrease in other non-current assets 4.68 33.57 (Increase)/ decrease in inventories (611.72) 12.08 (Increase) in trade receivables (722.41) (140.95) (Increase)/ decrease in other current assets (491.86) 72.89 (Decrease) in provisions (11.32) (106.32) Increase in trade payables 508.23 24.79 Increase in other financial liabili�es 85.69 167.27 Increase/ (decrease) in other current liabili�es 149.20 (38.75)

Cash generated by opera�ng ac�vi�es 1,841.02 2,341.29

Income tax (paid), net (355.47) (426.34)

Net cash generated from opera�ng ac�vi�es (A) 1,485.55 1,914.95

Cash flow from inves�ng ac�vi�es Acquisi�on of property, plant and equipment (2,179.30) (1,364.26) (including capital advances) Proceeds from sale of property, plant and equipment 178.19 49.36 Payment for purchase of investments in subsidiary (1,914.42) (1,564.02) Movement in other bank balances 189.35 (430.91) Interest received 74.13 111.88 Dividend received 0.30 -

Net cash (used) in inves�ng ac�vi�es (B) (3,651.75) (3,197.95)

Year ended31 March

2018

Year ended31 March

2017

Cash flow statement for the year ended 31 March 2018(All amounts are in Indian Rupees Lakhs except for share data)

KDDL Limited

87

Cash flow from financing ac�vi�es Proceeds from issue of share capital (including premium) 225.00 2,250.79

Share issue expenses - (10.10)

Proceeds from non-current borrowings 2,340.27 1,608.15

Repayment of non-current borrowings (1,127.31) (1,396.56)

Proceeds from/repayments of current borrowings (net) 201.27 (14.69)

Finance cost paid (436.33) (563.79)

Dividend paid (162.60) -

Tax on dividend (33.11) -

Net cash flow provided by financing ac�vi�es (c) 1,007.19 1,873.80

Net (decrease)/ increase in cash and cash equivalents (A+B+C) (1,159.01) 590.80

Cash and cash equivalents at the beginning of period (see below) (412.46) (1,003.26)

Cash and cash equivalents at the end of period (see below) (1,571.47) (412.46)

Notes:

1. Components of cash and cash equivalents:

Balances with banks in current accounts 66.86 118.70

Remi�ances in-transit 108.15 -

Cash on hand 5.14 16.56

Bank overdra�s (1,751.62) (547.72)

(1,571.47) (412.46)

2. The above cash flow statement has been prepared under the indirect method set out in the applicable Indian

Accoun�ng Standard (Ind AS) 7 on "Statement of Cash Flow". Also, refer to note 2(r).

3. Refer note 17 for reconcilia�on of movements of liabili�es to cash flows arising from financing ac�vi�es.

4. During the year, the Company paid in cash Rs. 21.60 (previous year: Rs. 18.00) towards corporate social

responsibility (CSR) expenditure (including in Corporate social responsibility expenditure - Refer note 31 (b)).

Significant accoun�ng policies 2 Notes to the standalone Ind AS financial statements 3-44



Cash flow statement for the year ended 31 March 2018(All amounts are in Indian Rupees Lakhs except for share data)

KDDL Limited

88

The acccompanying notes form an integral part of the standalone Ind AS financial statements As per our report of even date a�ached For and on behalf of the Board of Directors of KDDL Limited



Place : Gurugram, Haryana Place : Gurugram, Haryana

Date : 14 May 2018 Date : 14 May 2018

1. Repor�ng en�ty

KDDL Limited ('the Company'), is a public limited company domiciled in India and was incorporated in January 1981. The Company is listed on BSE Limited and Na�onal Stock Exchange (NSE) of India Limited in India.

The Company is primarily engaged in the business of manufacturing dials, watch hands and precision components. Currently, the Company has its manufacturing facili�es, at Parwanoo (Himachal Pradesh) and Derabassi (Punjab) – dial manufacturing, Bengaluru (Karnataka) - hands and precision components manufacturing.

2. Significant accoun�ng policies

a) Basis of prepara�on

i) Statement of compliance

These standalone Ind AS financial statements have been prepared in accordance with Indian Accoun�ng Standards (Ind AS) as per the Companies (Indian Accoun�ng Standards) Rules, 2015 and the Companies (India Accoun�ng Standards) Amendment Rules, 2016 no�fied under sec�on 133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act.

The Company’s financial statements upto and for the year ended 31 March 2017 were prepared in accordance with the Companies (Accounts) Rules, 2014.

As these are Company’s first financial statements prepared in accordance with Indian Accoun�ng Standards (Ind AS), Ind AS 101, First �me adop�on of Indian Accoun�ng Standards has been applied. The transi�on was carried out from Indian Accoun�ng Principles generally accepted in India as prescribed under Sec�on 133 of the Act, which was the previous GAAP. An explana�on of how the transi�on to Ind AS has affected the previously reported financial posi�on, financial performance and cash flow of the Company is provided in Note 34.

The standalone Ind AS financial statements were authorized for issue by the Company’s Board of Directors on 14 May 2018.

ii) Func�onal and presenta�on currency

The func�onal currency of the Company is the Indian rupee. These standalone Ind AS financial statements are presented in Indian rupees. All amounts have been rounded-off to the nearest lakhs, up to two places of decimal, unless otherwise indicated.

iii) Basis of measurement

The standalone Ind AS financial statements have been prepared on the historical cost basis except for the following items:

Items Measurement basis

_____________________________________________________________________________________

Certain financial assets and liabili�es Fair value

(including deriva�ve instruments)

Net defined benefits (assets)/liability Fair value of the plan assets less present value of defined benefits obliga�ons

____________________________________________________________________________________

KDDL Limited

Notes to the Standalone Ind AS Financial Statements for the year ended 31 March 2018(All amounts are in Indian Rupees Lakhs except for share data)

89

iv) Use of es�mates and judgments

The prepara�on of standalone Ind AS financial statements in conformity with Generally Accepted Accoun�ng Principles (GAAP) requires management to make judgments, es�mates and assump�ons that affect the applica�on of accoun�ng policies and the reported amounts of assets, liabili�es, income and expenses and the disclosure of con�ngent liabili�es on the date of the standalone Ind AS financial statements. Actual results could differ from those es�mates. Es�mates and underlying assump�ons are reviewed on an ongoing basis. Any revision to accoun�ng es�mates is recognised prospec�vely in current and future periods.

In par�cular, informa�on about significant areas of es�ma�on uncertainty and cri�cal judgments in applying accoun�ng policies that have the most significant effects on the amounts recognised in the standalone Ind AS financial statements is included in the following notes:

- Note 2(a)(v) - Fair value measurement

- Note 2(b) and 3 – Assessment of useful life of Property, plant and equipment

- Note 2(c) and 4 – Assessment of useful life of Intangible assets

- Note 2(f), 2(g),19 and 37 – Recogni�on and measurement of provisions and con�ngencies, key assump�ons about the likelihood and magnitude of an ou�low of resources

- Note 2(l),7 and 20 - Recogni�on of tax expense including deferred tax

- Note 2(n) - Impairment of financial assets

- Note 2(o) - Impairment test of non-financial assets: key assump�ons underlying recoverable amounts and

- Note 38 - Measurement of defined benefit obliga�ons: key actuarial assump�ons; Share based payments

v) Measurement of fair values

A number of the Company’s accoun�ng policies and disclosures require measurement of fair values, for both financial and non-financial assets and liabili�es. The Company has an established control framework with respect to measurement of fair values. This includes the top management division which is responsible for overseeing all significant fair value measurements, including Level 3 fair values. The top management division regularly reviews significant unobservable inputs and valua�on adjustments. If third party informa�on, is used to measure fair values, then the top management division assesses the evidence obtained from the third par�es to support the conclusion that these valua�ons meet the requirement of Ind AS, including the level in the fair value hierarchy in which the valua�ons should be classified.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valua�on techniques as follows:

- Level 1: quoted prices (unadjusted) in ac�ve markets for iden�cal assets and liabili�es.

- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

When measuring the fair value of an asset or liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its en�rely in the same level of the fair value hierarchy as the lowest level input that is significant to the en�re measurement.

KDDL Limited


90

The Company recognises transfers between levels of the fair value hierarchy at the end of the repor�ng period during which the changes have occurred.

Further informa�on about the assump�ons made in measuring fair values used in preparing these standalone Ind AS financial statements is included in the respec�ve notes

b) Property, plant and equipment (‘PPE’)

Recogni�on and measurement

Items of PPE are measured at cost of acquisi�on or construc�on which includes capitalised finance costs less accumulated deprecia�on and/or accumulated impairment loss, if any.

Cost of an item of PPE comprises its purchase price, including import du�es and non-refundable purchase taxes, a�er deduc�ng trade discounts and rebates, any directly a�ributable cost of bringing the item to its working condi�on for its intended use. The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labour, any other costs directly a�ributable to bringing the item to working condi�on for its intended use, and es�mated costs of dismantling and removing the item and restoring the site on which it is located. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Capital work-in-progress comprises the cost of fixed assets that are not ready for their intended use at the repor�ng date. Advances paid towards acquisi�on of PPE outstanding at each Balance sheet date, are shown under other non-current assets.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in the Statement of Profit and Loss.

Transi�on to Ind AS

On transi�on to Ind AS, the Company has elected to con�nue with the carrying value of all of its property, plant and equipment as at 1 April 2016, measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment as on 1 April 2016.

Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

Deprecia�on

Deprecia�on is calculated on cost of items of PPE less their es�mated residual values over their es�mated useful lives using the straight-line method and is recognised in the Statement of Profit and Loss.

Deprecia�on on items of PPE is provided as per rates corresponding to the useful life specified in Schedule II to the Companies Act, 2013 read with the no�fica�on dated 29 August 2014 of the Ministry of Corporate Affairs. The es�mated useful lives of items of property, plant and equipment for the current and compara�ve periods are as follows:

KDDL Limited


91

- Deprecia�on on leasehold land and improvements carried out on buildings taken on lease is provided over the period of the lease or useful life of assets, whichever is lower.

Deprecia�on method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

Deprecia�on on addi�ons (disposal) is provided on a pro-rata basis i.e. from (upto) the date on which asset is ready for use (disposed of).

Derecogni�on

A property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use and disposal. Losses arising from re�rement and gains or losses arising from disposal of a tangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss.

c) Other intangible assets

Acquired Intangible

Intangible assets that are acquired by the Company are measured ini�ally at cost. Cost of an item of Intangible asset comprises its purchase price, including import du�es and non-refundable purchase taxes, a�er deduc�ng trade discounts and rebates, any directly a�ributable cost of bringing the item to its working condi�on for its intended use. A�er ini�al recogni�on, an intangible asset is carried at its cost less any accumulated amor�sa�on and any accumulated impairment loss.


Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in Statement of Profit and Loss as incurred.


On transi�on to Ind AS, the Company has elected to con�nue with the carrying value of its intangible assets recognised as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such intangible assets.

Amor�sa�on

Amor�sa�on is calculated to write off the cost of intangible assets over their es�mated useful lives using the straight-line method, and is included in deprecia�on and amor�sa�on expense in Statement of Profit and Loss.

The es�mated useful lives are as follows:

- Technical know-how 4 Years

- So�ware 6 Years

- Web Portal 6 Years

Amor�sa�on method, useful life and residual values are reviewed at the end of each financial year and adjusted if appropriate.

Derecogni�on

Intangible assets is derecognised on disposal or when no future economic benefits are expected from its use and disposal.

KDDL Limited


92

d) Inventories

Inventories are measured at the lower of cost and net realisable value. The methods of determining cost of various categories of inventories are as follows:

Raw materials Weighted average method

Traded Goods Weighted average method

Stores and spares Weighted average method

Work-in-progress and finished Variable cost at weighted average including an appropriate goods (manufactured) share of variable and fixed produc�on overheads. Fixed produc�on overheads are included based on normal capacity of produc�on facili�es.

The cost of inventories includes expenditure incurred in acquiring the inventories, produc�on or conversion costs and other costs incurred in bringing them to their present loca�on and condi�on.

Net realisable value is the es�mated selling price in the ordinary course of business, less the es�mated costs necessary to make the sale. The net realisable value of work-in-progress is determined with reference to the selling prices of related finished products.

Raw materials, components and other supplies held for use in the produc�on of finished products are not wri�en down below cost except in cases where material prices have declined and it is es�mated that the cost of the finished products will exceed their net realisable value.

The comparison of cost and net realisable value is made on an item-by-item basis.

e) Employee benefits

Short-term employee benefits

Short-term employee benefit obliga�ons are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., salaries and wages and bonus etc., if the Company has a present legal or construc�ve obliga�on to pay this amount as a result of past service provided by the employee, and the amount of obliga�on can be es�mated reliably.

Share-based payment transac�ons

The grant date fair value of equity se�led share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees uncondi�onally become en�tled to the awards. The amount recognised as expense is based on the es�mate of the number of awards for which the related service and non-market ves�ng condi�ons are expected to be met, such that the amount ul�mately recognised as an expense is based on the number of awards that do meet the related service and non- market ves�ng condi�ons at the ves�ng date.

The Company has elected to apply Ind AS 102 Share based payment to equity instruments that vested a�er the date of transi�on to Ind AS pursuant to the exemp�on under Ind AS 101.

Post-employment benefits

Defined contribu�on plans

A defined contribu�on plan is a post-employment benefit plan under which an en�ty pays specified contribu�ons to a separate en�ty and will have no legal or construc�ve obliga�on to pay further amounts. The Company makes specified monthly contribu�ons towards employee provident fund and employee

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state insurance scheme (‘ESI’) to Government administered scheme which is a defined contribu�on plan. The Company’s contribu�on is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. Certain employees of the Company are also par�cipants in the superannua�on plan (“the Plan”), a defined contribu�on plan. The Company makes specified monthly contribu�ons to Life Insurance Corpora�on of India (LIC). Contribu�on made by the Company to the plan during the year is charged to Statement of Profit and Loss.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribu�on plan. Gratuity is a defined benefit plan. The administra�on of the gratuity scheme has been entrusted to the Life Insurance Corpora�on of India (‘LIC’). The Company’s net obliga�on in respect of gratuity is calculated separately by es�ma�ng the amount of future benefit that employees have earned in the current and prior periods, discoun�ng that amount and deduc�ng the fair value of any plan assets.

The calcula�on of defined benefit obliga�on is performed annually by a qualified actuary using the projected unit credit method.

Re-measurements of the net defined benefit liability i.e. Gratuity, which comprise actuarial gains and losses are recognised in Other Comprehensive Income (OCI). The Company determines the net interest expense (income) on the net defined benefit liability for the period by applying the discount rate used to measure the defined benefit obliga�on at the beginning of the annual period to the then- net defined benefit liability, taking into account any changes in the net defined benefit liability during the period as a result of contribu�ons and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in the Statement of Profit and Loss.

When the benefits of a plan are changed or when a plan is curtailed, the resul�ng change in benefit that relates to past service (‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognised immediately in the Statement of Profit and Loss. The Company recognises gains and losses on the se�lement of a defined benefit plan when the se�lement occurs.

Compensated absences

The Company’s net obliga�on in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. Such obliga�on such as those related to compensate absences is measured on the basis of an annual independent actuarial valua�on using the projected unit cost credit method. Remeasurements gains or losses are recognised in profit or loss in the period in which they arise.

f) Provisions (other than for employee benefits)

A provision is recognised if, as a result of a past event, the Company has a present legal or construc�ve obliga�on that can be es�mated reliably, and it is probable that an ou�low of economic benefits will be required to se�le the obliga�on. Provisions are determined by discoun�ng the expected future cash flows (represen�ng the best es�mate of the expenditure required to se�le the present obliga�on at the balance sheet date) at a pre-tax rate that reflects current market assessments of the �me value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future losses are not provided for.

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g) Con�ngent liabili�es and con�ngent assets

A con�ngent liability exists when there is a possible but not probable obliga�on, or a present obliga�on that may, but probably will not, require an ou�low of resources, or a present obliga�on whose amount cannot be es�mated reliably. Con�ngent liabili�es do not warrant provisions, but are disclosed unless the possibility of ou�low of resources is remote.

Con�ngent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the en�ty. Con�ngent assets are recognized when the realisa�on of income is virtually certain, then the related asset is not a con�ngent asset and its recogni�on is appropriate.

A con�ngent asset is disclosed where an inflow of economic benefits is probable.

h) Commitments

Commitments include the amount of purchase order (net of advances) issued to par�es for comple�on of assets. Provisions, con�ngent liabili�es, con�ngent assets and commitments are reviewed at each repor�ng date.

i) Revenue

Sale of goods

Revenue from the sale of goods in the course of ordinary ac�vi�es includes excise duty �ll 30 June 2017 (goods and service tax (’GST’) with effect from 1 July 2017)and is measured at the fair value of the considera�on received or receivable, exclusive of taxes as applicable such as sales tax, value added taxes (VAT), service tax and GST, and is net of returns, trade discounts, quan�ty discounts and cash discounts. Revenue includes shipping and handling costs billed to the customer.

Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the considera�on is probable, the associated costs and possible return of goods can be es�mated reliably, there is no con�nuing effec�ve control over, or managerial involvement with, the goods, and the amount of revenue can be measured reliably.

Sale of services

Revenue from services rendered is recognised in profit or loss when the services are rendered and the related costs are incurred.

Export benefits

Export benefits under various schemes no�fied by the government are recognized on accrual basis when no significant uncertain�es as to the amount of considera�on that would be derived and as to its ul�mate collec�on exist.

j) Recogni�on of interest income or expense

Interest income or expense is recognised using the effec�ve interest method.

The ‘effec�ve interest rate’ is the rate that exactly discounts the es�mated future cash payments or receipts through the expected life of the financial instrument to:

- The gross carrying amount of the financial asset; or

- The amor�sed cost of the financial liability.

In calcula�ng interest income and expense, the effec�ve interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amor�sed cost of the liability. However, for financial assets that have become credit-impaired subsequent to ini�al recogni�on, interest income is calculated by applying the effec�ve interest rate to the amor�sed cost of the financial asset. If the asset is no longer credit-impaired, then the calcula�on of interest income reverts to the gross basis.

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k) Borrowing costs

Borrowing costs are interest and other costs (including exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred by the Company in connec�on with the borrowing of funds. Borrowing costs directly a�ributable to acquisi�on or construc�on of an asset which necessarily take a substan�al period of �me to get ready for their intended use are capitalized as a part of cost of the asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

l) Income taxes

Income tax comprises current and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that it relates to a business combina�on or an item recognised directly in equity or in other comprehensive income.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best es�mate of the tax amount expected to be paid or received a�er considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substan�vely enacted by the repor�ng date.

Current tax assets and current tax liabili�es are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and se�le the liability on a net basis or simultaneously.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of the assets and liabili�es for financial repor�ng purposes and the corresponding amounts used for taxa�on purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits.

Deferred tax assets are recognised to the extent that it is probable that future profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case of history of recent losses, the Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realized. Deferred tax assets – unrecognised or recognised, are reviewed at each repor�ng date and are recognised / reduced to the extent that it is probable / no longer probable respec�vely that the related tax benefits will be realized.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is se�led, based on the laws that have been enacted or substan�vely enacted by the repor�ng date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the repor�ng date, to recover or se�le the carrying amount of its assets and liabili�es.

Deferred tax assets and deferred tax liabili�es are offset only if there is a legally enforceable right to offset current tax liabili�es and assets, and they relate to income taxes levied by the same tax authori�es.

m) Leases

At the incep�on of each lease, the lease arrangement is classified as either a finance lease or an opera�ng lease based on the substance of the lease arrangement.

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Opera�ng leases

Leases in which a significant por�on of the risks and rewards of ownership are not transferred to the Company as lessee are classified as opera�ng leases. Payment made under opera�ng leases (net of any incen�ves received from the lessor) are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease unless the payment are structured to increase in line with expected general infla�on to compensate for the lessor’s expected infla�onary cost increases.

Finance leases

Leases of property, plant and equipment that transfer to the Company substan�ally all the risk and rewards of ownership are classified as finance leases. The leased assets are measured ini�ally at an amount equal to the lower of their fair value and the present value of minimum lease payments. Subsequent to ini�al recogni�on, the assets are accounted for in accordance with the accoun�ng policy applicable to similar owned assets.

Assets held under leases that do not transfer to the Company substan�ally all the risk and rewards of ownership (i.e. opera�ng leases) are not recognised in the Company’s Balance Sheet.

n) Financial instruments

A Financial instrument is any contract that gives rise to a financial asset of one en�ty and a financial liability or equity instrument of another en�ty.

Financial assets

Ini�al recogni�on and measurement

All financial assets are recognised ini�ally at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transac�on costs that are a�ributable to the acquisi�on of the financial asset. Purchases or sales of financial assets that require delivery of assets within a �me frame established by regula�on or conven�on in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

l Debt instruments at amor�sed cost

l�Debt instruments at fair value through other comprehensive income (FVOCI)

l�Debt instruments, deriva�ves and equity instruments at fair value through profit or loss (FVPL)

l�Equity instruments measured at fair value through other comprehensive income (FVOCI)

Debt instruments at amor�sed cost

A 'debt instrument' is measured at the amor�sed cost if the asset is held within a business model whose objec�ve is to hold assets for collec�ng contractual cash flows, and contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

A�er ini�al measurement, such financial assets are subsequently measured at amor�sed cost using the effec�ve interest rate (EIR) method. The effec�ve interest rate is the rate that exactly discounts es�mated future cash payments or receipts through the expected life of the financial instrument to the gross carrying amount of the financial asset or the amor�sed cost of the financial liability. Amor�sed cost is calculated by taking into account any discount or premium on acquisi�on and fees or costs that are an integral part of the EIR. The EIR amor�sa�on is included in other income in the Statement of Profit and Loss. The losses arising

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from impairment are recognised in the Statement of Profit and Loss.

Debt instrument at FVOCI

A 'debt instrument' is classified as at the FVOCI if the objec�ve of the business model is achieved both by collec�ng contractual cash flows and selling the financial assets, and the asset's contractual cash flows represent SPPI.

Debt instruments included within the FVOCI category are measured ini�ally as well as at each repor�ng date at fair value. Fair value movements are recognised in the other comprehensive income (OCI). On derecogni�on of the asset, cumula�ve gain or loss previously recognised in OCI is reclassified to the Statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Debt instrument at FVPL

FVPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categoriza�on as at amor�sed cost or as FVOCI, is classified as at FVPL. In addi�on, at ini�al recogni�on, the Company may irrevocably elect to designate a debt instrument, which otherwise meets amor�sed cost or FVOCI criteria, as at FVPL. However, such adop�on is allowed only if doing so reduces or eliminates a measurement or recogni�on inconsistency (referred to as 'accoun�ng mismatch').

Debt instruments included within the FVPL category are measured at fair value with all changes recognised in the Statement of Profit and Loss.

Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and con�ngent considera�on recognised by an acquirer in a business combina�on to which Ind AS 103 applies are classified as at FVPL. For all other equity instruments, the Company may make an irrevocable adop�on to present in other comprehensive income subsequent changes in the fair value. The Company makes such adop�on on an instrument-by-instrument basis. The classifica�on is made on ini�al recogni�on and is irrevocable.

If the Company decides to classify an equity instrument as at FVOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to the Statement of Profit and Loss, even on sale of investment. However, the Company may transfer the cumula�ve gain or loss to retained earnings. KDDL Limited Notes to the Standalone Ind AS Financial Statements for the year ended 31 March 2018

Equity instruments included within the FVPL category are measured at fair value with all changes recognised in the Statement of Profit and Loss.

Impairment of financial assets

The Company recognises loss allowances for expected credit loss on financial assets measured at amor�sed cost. At each repor�ng date, the Company assesses whether financial assets carried at amor�sed cost are credit- impaired. A financial asset is 'credit-impaired' when one or more events that have detrimental impact on the es�mated future cash flows of the financial assets have occurred.

Evidence that the financial asset is credit-impaired includes the following observable data:

- significant financial difficulty of the borrower or issuer;

- the breach of contract such as a default or being past due for 90 days or more;

- the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

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- it is probable that the borrower will enter bankruptcy or other financial re-organisa�on; or

- the disappearance of ac�ve market for a security because of financial difficul�es.

The Company measures loss allowances at an amount equal to life�me expected credit losses, except for the following, which are measured as 12 month expected credit losses:

- Bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since ini�al recogni�on.

Loss allowances for trade receivables are always measured at an amount equal to life�me expected credit losses. Life�me expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

12-month expected credit losses are the por�on of expected credit losses that result from default events that are possible within 12 months a�er the repor�ng date (or a shorter period if the expected life of the instrument is less than 12 months). In all cases, the maximum period considered when es�ma�ng expected credit losses is the maximum contractual period over which the Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since ini�al recogni�on and when es�ma�ng expected credit losses, the Company considers reasonable and supportable informa�on that is relevant and available without undue cost or effort. This includes both quan�ta�ve and qualita�ve informa�on and analysis, based on the Company's historical experience and informed credit assessment and including forward looking informa�on.

Measurement of expected credit losses

Expected credit losses are a probability-weighted es�mate of credit losses. Credit losses are measured as the present value of all cash shor�alls (i.e. difference between the cash flow due to the Group in accordance with the contract and the cash flow that the Company expects to receive).

Presenta�on of allowance for expected credit losses in the balance sheet

Loss allowance for financial assets measured at the amor�sed cost is deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is wri�en off (either par�ally or in full) to the extent that there is no realis�c prospect of recovery. This is generally the case when the Company determines that the debtors do not have assets or sources of income that could generate sufficient cash flows to repay the amount subject to the write-off. However, financial assets that are wri�en off could s�ll be subject to enforcement ac�vi�es in order to comply with the Company's procedure for recovery of amounts due.

Derecogni�on of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Company's balance sheet) when:

- The rights to receive cash flows from the asset have expired, or

- The Company has transferred its rights to receive cash flows from the asset or has assumed an obliga�on to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the Company has transferred substan�ally all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substan�ally all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-

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through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substan�ally all of the risks and rewards of the asset, nor transferred control of the asset, the Company con�nues to recognise the transferred asset to the extent of the Company's con�nuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obliga�ons that the Company has retained.

Financial liabili�es

Financial liabili�es are classified as measured at amor�sed cost or FVPL. A financial liability is classified as at FVPL if it is classified as held-for-trading, or it is a deriva�ve or it is designated as such on ini�al recogni�on. Financial liabili�es at FVPL are measured at fair value and net gains and losses, including any interest expense, are recognised in Statement of Profit and Loss. Other financial liabili�es are subsequently measured at amor�sed cost using the effec�ve interest method. Interest expense and foreign exchange gains and losses are recognised in Statement of Profit and Loss. Any gain or loss on derecogni�on is also recognised in Statement of Profit and Loss.

Derecogni�on of financial liabili�es

A financial liability is derecognised when the obliga�on under the liability is discharged or cancelled or expires. When an exis�ng financial liability is replaced by another from the same lender on substan�ally different terms, or the terms of an exis�ng liability are substan�ally modified, such an exchange or modifica�on is treated as the derecogni�on of the original liability and the recogni�on of a new liability. The difference in the respec�ve carrying amounts is recognised in the Statement of Profit and Loss.

Deriva�ve financial instruments

The Company uses various types of deriva�ve financial instruments to hedge its currency and interest risk etc. Such deriva�ve financial instruments are ini�ally recognised at fair value on the date on which a deriva�ve contract is entered into and are subsequently re-measured at fair value. Deriva�ves are carried as financial assets when the fair value is posi�ve and as financial liabili�es when the fair value is nega�ve.

Offse�ng

Financial assets and financial liabili�es are offset and the net amount presented in the Balance Sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to se�le them on a net basis or to realise the asset and se�le the liability simultaneously.

o) Impairment of non-financial assets

The Company's non-financial assets other than inventories and deferred tax assets, are reviewed at each repor�ng date to determine if there is indica�on of any impairment. If any such indica�on exists, then the asset's recoverable amount is es�mated. For impairment tes�ng, assets that do not generate independent cash flows are grouped together into cash genera�ng units (CGUs). Each CGU represents the smallest Company of assets that generate cash inflows that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of as CGU (or an individual asset) is the higher of its value in use and fair value less cost to sell. Value in use is based on the es�mated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current assessments of the �me value of money and the risks specific to the CGU (or the asset).

The Company's corporate assets (e.g., central office building for providing support to CGU) do not generate independent cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the corporate asset belongs.

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An impairment loss is recognised whenever the carrying amount of an asset or its cash genera�ng unit exceeds its recoverable amount. Impairment losses are recognised in Statement of Profit and Loss. An impairment loss is reversed if there has been a change in the es�mates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined net of deprecia�on or amor�sa�on, if no impairment loss had been recognised.

p) Opera�ng Segments

An opera�ng segment is a component of the Company that engages in business ac�vi�es from which it may earn revenues and incur expenses, including revenues and expenses that relate to transac�ons with any of the Company's other components, and for which discrete financial informa�on is available. All opera�ng segments' opera�ng results are reviewed regularly by the Company's Chief Opera�ng Decision Maker (CODM) to make decisions about resources to be allocated to the segments and assess their performance.

q) Cash and cash equivalents

For the purpose of presenta�on in the statement of cash flows, cash and cash equivalents include cash in hand, demand deposits held with banks, other short-term highly liquid investments with original maturi�es of three months or less that are readily conver�ble to known amounts of cash and which are subject to an insignificant risk of changes in value.

r) Cash flow statement

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transac�ons of a non-cash nature, any deferrals or accruals of past or future opera�ng cash receipts or payments and item of income or expenses associated with inves�ng or financing cash flows. The cash flows from opera�ng, inves�ng and financing ac�vi�es of the Company are segregated.

s) Earnings per share

Basic earnings/ (loss) per share are calculated by dividing the net profit/ (loss) for the year a�ributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue and share split. For the purpose of calcula�ng diluted earnings/ (loss) per share, the net profit or loss for the period a�ributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilu�ve poten�al equity shares.

t) Foreign currency transac�ons

Ini�al recogni�on

Transac�ons in foreign currencies are translated into the func�onal currency of the Company at the exchange rates at the dates of the transac�ons.

Measurement at the repor�ng date

Monetary assets and liabili�es denominated in foreign currencies are translated into the func�onal currency at the exchange rate at the repor�ng date. Non-monetary assets and liabili�es that are measured at fair value in a foreign currency are translated into the func�onal currency at the exchange rate when the fair value was determined. Non-monetary assets and liabili�es that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transac�on. Exchange differences on restatement/se�lement of all monetary items are recognised in statement of profit and loss.

u) Recent Accoun�ng pronouncements

Applicable standards issued but not yet effec�ve

Ind AS 115, Revenue from contracts with customers

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Ind AS 115 establishes a single comprehensive model for en��es to use in accoun�ng for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recogni�on standard Ind AS 18 Revenue, Ind AS 11 Construc�on Contracts when it becomes effec�ve.

The core principle of Ind AS 115 is that an en�ty should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the considera�on to which the en�ty expects to be en�tled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recogni�on:

- Step 1: Iden�fy the contract(s) with a customer

- Step 2: Iden�fy the performance obliga�on in contract

- Step 3: Determine the transac�on price

- Step 4: Allocate the transac�on price to the performance obliga�ons in the contract

- Step 5: Recognise revenue when (or as) the en�ty sa�sfies a performance obliga�on

Under Ind AS 115, an en�ty recognises revenue when (or as) a performance obliga�on is sa�sfied, i.e. when 'control' of the goods or services underlying the par�cular performance obliga�on is transferred to the customer.

The Company has completed its evalua�on of the possible impact of Ind AS 115 and does not expect the impact of the adop�on of the new standard to be material.

Appendix B, Ind AS 21 – The effect of changes in Foreign Exchange rates

The amendment clarifies on the accoun�ng of transac�ons that include the receipt or payment of advance considera�on in a foreign currency. The appendix explains that the date of the transac�on, for the purpose of determining the exchange rate, is the date of ini�al recogni�on of the non-monetary prepayment asset or deferred income liability. If there are mul�ple payments or receipts in advance, a date of transac�on is established for each payment or receipt. The Company has completed its evalua�on and the possible impact of this amendment and does not expect the impact and adop�on of this amendment to be material.

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Notes:d. Refer note 34 for a reconcilia�on of deemed cost as considered by the Company pursuant to transi�on provision under Ind AS 101.

4. Other intangible assets

Gross carrying amount (refer to note d)

Technical

know-how

So�wares Web portal Total

Deemed cost

Balance as at 1 April 2016 21.61

63.20

13.03

97.84

Addi�ons - acquired -

8.73

-

8.73

Balance as at 31 March 2017 21.61

71.93

13.03

106.57


71.93

13.03

106.57 Addi�ons - acquired -

15.04

-

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86.97

13.03

121.61

Accumulated amor�sa�on (refer to note d)

Balance as at 1 April 2016 -

-

-

-

Amor�sa�on for the year 3.72

27.25

9.32

40.29


27.25

9.32

40.29


27.25

9.32

40.29


24.34

-

25.25


51.59

9.32

65.54

Carrying amounts (net)

At 1 April 2016 21.61

63.20

13.03

97.84

At 31 March 2017 17.89

44.68

3.71

66.28

At 31 March 2018 16.98

35.38

3.71

56.07

KDDL Limited

104


5. Investments Non-current investments

Unquoted investments (fully paid up)

Investment in equity shares (at cost) Subsidiary Companies (at cost):

- Pylania SA, Switzerland

7,550 (31 March 2017: 7,550, 1 April 2016: 7,550)

equity shares of Swiss Franc (CHF) 100 each fully paid up 281.24 281.24 281.24

- Ethos Limited

10,223,508 (31 March 2017: 8,503,736, 1 April 2016: 7,665,648)

equity shares of Rs. 10 each fully paid up (a), (b) 5,390.98 3,026.56 1,804.92

- Mahen Distribu�on Limited

5,700,000 (31 March 2017: 5,700,000, 1 April 2016: 5,700,000)

equity shares of Rs 10 each fully paid up 570.00 570.00 570.00

- Kamla Interna�onal Holdings SA, Switzerland

6,000 (31 March 2017: 6,000, 1 April 2016: 6,000)

equity shares of Swiss Franc (CHF) 100 each fully paid up 383.51 383.51 383.51

- Satva Jewellery and Design Limited

3,000,000 (31 March 2017: 3,000,000, 1 April 2016: Nil)

equity shares of Rs. 10 each fully paid up (c) 150.00 150.00 -

6,775.73 4,411.31 3,039.67

Associate (at cost):

- Kamla Tesio Dials Limited.

300,000 (31 March 2017: 300,000, 1 April 2016: 300,000)

equity shares of Rs. 10 each fully paid up 30.00 30.00 30.00

30.00 30.00 30.00

Joint venture (at cost):

- Satva Jewellery and Design Limited

Nil (31 March 2017: Nil, 1 April 2016: 1,500,000)

equity shares of Rs. 10 each fully paid up (c) - - 150.00

- - 150.00

Other Companies (Fair value through Statement of profit and loss):

- Karolview Developers Private Limited

500,000 (31 March 2017: 500,000, 1 April 2016: 500,000)


As at 31 March

2018

As at 31 March

2017

Note As at 1 April

2016

105

KDDL Limited


- Shivalik Waste Management Limited

17,500 (31 March 2017: 17,500, 1 April 2016: 17,500)


48.66 48.66 51.28

6,854.39 4,489.97 3,270.95

Investment in preference shares

Subsidiary Companies :

- Ethos Limited

- Nil (31 March 2017: 300,000, 1 April 2016: Nil) 12%

cumula�ve redeemable preference shares of Rs. 100 each - 300.00 -

- Nil (31 March 2017: 136,363, 1 April 2016: Nil) 12% cumula�ve

compulsory conver�ble preference

shares of Rs. 110 each fully paid up - 150.00 150.00

- 19,230 (31 March 2017: 19,230, 1 April 2016: 19,230) 14%

cumula�ve compulsory conver�ble preference

shares of Rs. 130 each fully paid up 25.00 25.00 25.00

- Mahen Distribu�on Limited

2,28,700 (31 March 2017: 2,28,700, 1 April 2016: 114,350) 12% fully

conver�ble cumula�ve preference shares of Rs. 56 each fully paid 128.07 128.07 64.04

153.07 603.07 239.04

Impairment in value of investments

Subsidiary Companies:

- Pylania SA, Switzerland 98.43 98.43 98.43

- Satva Jewellery and Design Limited 150.00 150.00 -

Associate:

- Kamla Tesio Dials Limited - 10.00 10.00

Joint venture:

- Satva Jewellery and Design Limited - - 150.00

248.43 258.43 258.43

Total non-current investments 6,759.03 4,834.61 3,251.56

Aggregate amount of unquoted investments 6,759.03 4,834.61 3,251.56

Aggregate amount of impairment in value of investments 248.43 258.43 258.43

As at 31 March

2018

As at 31 March

2017

Note As at 1 April

2016

106

KDDL Limited


Notes:

(a) This includes Rs. 14.51 (31 March 2017: Rs. 14.51, 1 April 2016: Rs. 14.51) which represents fair value of

financial guarantees given to Ethos Limited.

(b) This includes Rs. 36.07 (31 March 2017: Rs. 21.65, 1 April 2016: Rs. Nil) which represents dividend on

investment in preference shares of Ethos Limited which has been waived by the company and is considered

as quasi equity contribu�on as it is no longer payable by Ethos Limited.

(c ) With effect from 23 December 2016, Satva Jewellery and Design Limited ceased to be a joint venture and

became subsidiary of the Company (refer to note 39).

7 Income tax asset (net) Advance income-tax (net of provision of Rs. 739.27 (31 March 2017: Rs. 739.27, 1 April 2016: Rs. 1,195.78) 499.73 499.73 425.20

499.73 499.73 425.20

8 Other non-current assets (Unsecured, considered good, unless otherwise stated) Capital advances 121.19 126.25 4.43 - to others Advances other than capital advances - Advances to employees 51.13 9.62 35.58 - Prepaid expenses 4.36 36.91 44.51

176.68 172.78 84.52

6 Loans Non-Current Current

(Unsecured, considered good unless otherwise stated) As at As at As at As at As at As at

31 March 31 March 1 April 31 March 31 March 1 April

2018 2017 2016 2018 2017 2016

Security deposit

- to related par�es (refer to note 39) 2.00 2.00 2.00 - - -

- to others 105.73 120.65 109.52 22.58 - -

Loan to related par�es (refer to note 39) - - - 103.94 103.94 103.94

Loan to employees

- to related par�es (refer to note 39) 30.07 33.46 35.70 6.17 8.77 -

- to others 31.12 14.08 54.10 44.69 40.68 22.59

168.92 170.19 201.32 177.38 153.39 126.53

KDDL Limited

As at As at As at

31 March 31 March 1 April

Note 2018 2017 2016

107


9 Inventories (at lower of cost and net realisable value) Raw materials* 1,410.04 1,135.36 1,153.94 Work-in-progress 977.64 667.64 600.83 Finished goods 99.47 83.33 93.44 Stores and spares 226.14 215.24 265.44

2,713.29 2,101.57 2,113.65

* Includes goods-in-transit-raw materials 5.38 12.94 16.07

10 Trade receivables (Unsecured, considered good, unless otherwise stated) Trade receivables - Related par�es (refer to note 39) 19.54 - - - Others - considered good 2,836.63 2,119.79 1,992.16 - considered doub�ul 6.80 8.79 9.09 Less: expected credit loss allowance (6.80) (8.79) (9.09)

2,856.17 2,119.79 1,992.16

11 Cash and cash equivalents Balances with banks - in current accounts 66.86 118.70 75.51 Remi�ances in-transit 108.15 - - Cash on hand 5.14 16.56 13.80 180.15 135.26 89.31

12 Other bank balances Deposit accounts with original maturity more than 3

months and upto 12 months from the repor�ng date (a) 649.02 838.37 407.46

Balance in unclaimed dividend accounts 23.94 19.69 25.21 672.96 858.06 432.67Notes:(a) These deposits include restricted bank deposits amoun�ng to Rs. 622.23 (31 March 2017: Rs. 838.37, 1 April

2016: Rs. 407.46) on account of deposits pledged as security for deposits from shareholders, bank guarantee and

margin money.

13 Other financial assets

Interest accrued 21.78 21.84 20.57

Recoverable from related par�es (refer to note 39) 64.11 76.09 96.22 85.89 97.93 116.79

KDDL Limited

As at As at As at


Note 2018 2017 2016

108


Number of Amount Number of Amount Number of Amount Shares Shares Share

14 Other current assets (Unsecured, considered good, unless otherwise stated) Recoverable from / balance with government authori�es 645.15 306.11 344.60 Advances for supply of goods and services 234.82 117.67 89.80 Advances to employees 84.26 66.44 97.48 Prepaid expenses 67.69 49.84 71.83 1,031.92 540.06 603.71

Number of Amount Number of Amount Number of Amount Shares Shares Share Authorised

Equity shares of Rs. 10 each. 12,480,000 1,248.00 12,480,000 1,248.00 12,480,000 1,248.00

12,480,000 1,248.00 12,480,000 1,248.00 12,480,000 1,248.00

Issued

Equity shares of Rs. 10 each 11,127,072 1,112.71 11,013,866 1,101.39 10,259,150 1,025.92 11,127,072 1,112.71 11,013,866 1,101.39 10,259,150 1,025.92

Subscribed and paid up capital

Equity shares of Rs. 10 each fully paid up 10,952,792 1,095.28 10,839,586 1,083.96 10,084,870 1,008.49

Forfeited equity shares of Rs.10 each 174,280 8.71 174,280 8.71 174,280 8.71

11,127,072 1,103.99 11,013,866 1,092.67 10,259,150 1,017.20

(ii) Rights, preferences and restric�ons a�ached to shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to

dividends and share in the Company’s residual assets on winding up. The equity shares are en�tled to

receive dividend as declared from �me to �me. The vo�ng rights of an equity shareholder on a poll (not on

show of hands) are in propor�on to its share of the paid-up equity capital of the Company. Vo�ng rights

cannot be exercised in respect of shares on which any call or other sums presently payable have not been

paid. Failure to pay any amount called up on shares may lead to forfeiture of the shares. On winding up of the

Company, the holders of equity shares will be en�tled to receive the residual assets of the Company,

remaining a�er distribu�on of all preferen�al amounts in propor�on to the number of equity shares held.

(iii) Reconcilia�on of the shares outstanding at beginning and at the end of the year

Par�culars

Balance at the beginning of the year 10,839,586 1,083.96 10,084,870 1,008.49 9,076,470 907.65

Add: Shares issued during the year 113,206 11.32 754,716 75.47 1,008,400 100.84

Balance at the end of the year 10,952,792 1,095.28 10,839,586 1,083.96 10,084,870 1,008.49

KDDL Limited

As at As at As at


Note 2018 2017 2016

15. Equity Share capital

(i) Details of share capital As at 31 March 2018 As at 31 March 2017 As at 1 April 2016

109

As at 31 March 2018 As at 31 March 2017 As at 1 April 2016


(iv) Details of Equity shares held by shareholders holding more than 5% of the aggregate equity shares in the

Company:

Number of % of equity Number of % of equity Number of % of equity

shares shares held shares shares held shares shares held

R. K. Saboo 2,058,460 19% 2,058,460 19% 2,058,460 20%

Yashovardhan Saboo 1,547,265 14% 1,509,530 14% 1,509,530 15%

Saif India V FII Holdings Limited 1,008,400 9% 1,008,400 9% 1,008,400 10%

Saif Partners India V Limited 754,716 7% 754.716 7% - -

(v) Bonus shares, shares buyback and issue of shares for considera�on other than in cash (during five years

immediately preceding 31 March 2018)

During the five years immediately preceding 31 March 2018, neither any bonus shares have been issued nor

any shares have been bought back. Further, no shares have been issued for considera�on other than cash

except during the year ended 31 March 2015, 39,750 equity shares of Rs. 10 each had been issued under

employee stock op�on plans for which only exercise price had been received in cash.

(vi) Employee stock op�on plan

Terms a�ached to stock op�ons granted to employees of the Company are described in note 38D regarding

share based payments.

(vii) Shares reserved for issue under op�ons and other commitments

Under KDDL Employee Stock Op�on 21,000 2.10 21,000 2.10 24,750 2.48Plan - 2011: 21,000 equity shares of

Rs.10 each, at an exercise price of

Rs. 120 per share (Refer note 38D)

16 Other equity(also refer to Statement of Changes in Equity)

(i) Securi�es premium

Securi�es premium represents the excess considera�on received by the Company over the face value of the

shares issued to shareholders. This will be u�lised in accordance with the applicable provisions of the

Companies Act, 2013.

(ii) General reserve

The General reserve is used from �me to �me to transfer profits from retained earnings for appropria�on purposes. As the General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General reserve will not be reclassified subsequently to the Statement of Profit and Loss.

(iii) Employee stock op�ons outstanding reserve

The fair value of the equity se�led share based payment transac�ons with employees is recognised in Statement of Profit and Loss with corresponding credit to share based payment reserve.

KDDL Limited


110

Number of Amount Number of Amount Number of Amount Shares Shares Share


(iv) Retained earnings

Retained earnings are the profits that the Company has earned �ll date, less any transfers to general reserve, dividends or other distribu�ons paid to shareholders.

(v) Money received against shares warrants

A share warrant is a financial instrument which gives holder the right to acquire equity shares. Money Received against Shares Warrants comprise of share warrants issued by the Company against which shares are yet to be allo�ed.

During the previous year ended 31 March 2017, the Company had issued 377,356 share warrant sat Rs.265 per share warrant (including securi�es premium of Rs 255 per share warrant) on a preferen�al allotment basis to certain promoters and promoter en��es ('warrant holders') and had also received 25% applica�on money amoun�ng to Rs 66.25 per share warrant. The warrants are to be converted into equivalent number of equity shares on payment of balance 75% amount at any �me on or before the end of eighteen months from the date of allotment failing which these would stand forfeited. In the events the warrants are not converted into equity shares with in the said period, the Company is eligible to forfeit the amounts received towards the warrants. During the year ended 31 March 2018, the Company has allo�ed 113,206 equity shares on conversion of equivalent number of share warrants to certain warrant holders on realisa�on of balance 75% towards these warrants.

17 Borrowings

(I) Non-current borrowings

Term-loans

From banks (secured) (a) 149.61 517.16 1,204.68

From others (secured) (b) 2,937.99 1,392.51 620.03

3,087.60 1,909.67 1,824.71

Deposits from shareholders

From related par�es (unsecured) (refer to note 39) (c) 200.52 48.09 29.00

From others (unsecured) (c) 1,054.14 1,167.21 1,058.97

1,254.66 1,215.30 1,087.97

Total non-current borrowings (including current maturi�es) 4,342.26 3,124.97 2,912.68

Less : Current maturi�es of non-current borrowings 1,004.07 947.52 1,067.92

(refer to note 18)

3,338.19 2,177.45 1,844.76

Notes:

(a) - Corporate loan from IDBI Bank amoun�ng to Rs. 81.99 (31 March 2017: Rs. 194.35, 1 April 2016: Rs 248.67) carrying interest rate of 3% over the bank base rate are secured by way of first pari passu charge on all the plant and machinery and furniture and fixtures of Derabassi unit (KDER), tool room division at Bengaluru (EIGEN) and hands division at Bengaluru (KHAN-1) and second charge on all the current assets (save and except the book debts) subject to the first charge in favour of the Company's bankers for securing the working capital limits. Term loans from IDBI Bank Limited amoun�ng to Rs. Nil (31 March 2017: Rs. 106.80, 1

KDDL Limited

NoteAs at

31 March 2018

As at 31 March

2017

As at 1 April

2016

111


April 2016: Rs. 118.90) carried interest rate of 2.5% over the bank base rate. The term loan is further secured by way of first pari passu mortgage charge on freehold land and building of KDER. The term loans are also personally guaranteed by the Chairman & Managing Director of the Company. The Corporate loan is repayable in 2 equal quarterly instalments of Rs 28.12 each commencing from 31 May 2018 . The last instalment of Rs. 26.71 would be due on 30 November 2018.

- Vehicle loans from banks amoun�ng to Rs. 67.62 (31 March 2017: Rs. 29.72, 1 April 2016: Rs. 53.90) carrying interest rate in the range of 9.51% per annum to 11.00% per annum are secured against hypotheca�on of specific vehicle purchased out of the proceeds of those loans. The loans are to be repaid as per the respec�ve repayment schedule in equal monthly installments.

- Term loans from Bank of India amoun�ng to Rs. Nil (31 March 2017: Rs. 186.29, 1 April 2016: Rs. 552.32) carried interest rate of 2.95% over the bank MCLR are secured by way of first pari passu charge on all the plant and machinery and furniture and fixtures of the Company excluding the fixed assets installed at packaging division at Parwanoo (KPAC), hands division at Bengaluru (KHAN-2), and the plant and machinery and furniture and fixtures of dials division at Parwanoo (TTPA) acquired before 31 March 2005 and second charge on all the current assets (save and except the book debts) subject to the first charge in favour of the Company's bankers for securing the working capital limits. The term loan is further secured by way of first pari passu mortgage charge on freehold land and building of dials division at Derabassi (KDER). The term loans are also personally guaranteed by the Chairman Emeritus and Chief Execu�ve Officer (CEO) of the Company.

- Term loan from Corpora�on Bank amoun�ng to Rs. Nil (31 March 2017: Rs. Nil, 1 April 2016: Rs. 230.89) carried interest rate of 5.5% over the bank base rate, was secured by way of first exclusive charge on all the plant and machinery and furniture and fixtures of KHAN-2 and second charge on all the current assets (save and except the book debts) subject to the first charge in favour of the Company's bankers for securing the working capital limits. The loan is further secured by exclusive mortgage charge on freehold land and building of KHAN-1, situated at Bengaluru.

(b) - Term loan from Intec Capital limited amoun�ng to Rs. 42.46 (31 March 2017: Rs. 64.34, 1 April 2016: Rs. 83.53) carrying fixed interest rate of 11.75% is secured by way of hypotheca�on of the specific asset purchased out of proceeds of the loan. The loan is also personally guaranteed by Chairman Emeritus and Chairman & Managing Director of the Company. The loan is to be repaid in 32 monthly installments as per the repayment schedule in equal annual installments commencing from 1 April 2016. The last instalment would be repaid on 1 November 2019.

- Term loan from Tata Capital Financial Services Limited amoun�ng to Rs. 369.63 (31 March 2017: Rs. 504.87, 1 April 2016: Rs. 536.50) carrying interest rate equal to LTLR less 7% (presently 10.50%) is secured by way of first pari passu charge over the project leasehold immovable property and over movable fixed assets of Eigen III, situated at plot no. 55-A (Aerospace sector) Hitech, Devanahalli, Bengaluru. The loan is also personally guaranteed by Chairman & Managing Director of the Company. The loan is to be repaid in 33 monthly installments of Rs. 11.30 as per the repayment schedule in equal annual installments commencing from 25 April 2018. The last instalment would be repaid on 25 November 2020.

- Term loan from Tata Capital Financial Services Limited amoun�ng to Rs. 337.50 (31 March 2017: Rs. 427.51, 1 April 2016: Rs. Nil) carrying interest rate equal to LTLR less 7.25% (presently 10.50%) is secured by way of exclusive charge by way of mortgage over the freehold land & building of the borrower situated at plot number 296 & 297 (South western Por�on) 5th Main, 4th Phase, Peenya Industrial Area, Bengaluru and

KDDL Limited

112


exclusive charge by way of hypotheca�on over the plant & machineries & other movable assets of KHAN II, situated at 408, 4th Main, 11th Cross, Peenya Industrial Area, Bangalore 560058 (Karnataka). The loan is also personally guaranteed by Chairman & Managing Director of the Company. The loan is to be repaid in 15 quarterly installments of Rs. 22.50 as per the repayment schedule in equal annual installments commencing from 8 April 2018. The last instalment would be repaid on 8 October 2021.

- Term loan from Bajaj Finance Limited amoun�ng to Rs. 2161.77 (31 March 2017: Rs. 395.79, 1 April 2016: Rs. Nil) carrying interest rate of 9.60% is secured by pari passu charge by way of hypotheca�on of equipment procured out of the term loan, Mortgage of leasehold Land & building at Bengaluru ( Plot No. 55-A, Aerospace Sector) Hitech, Aerospace and Defence Park, Devanahalli, Bengaluru. The loan is also personally guaranteed by Chairman & Managing Director of the Company. The loan of Rs. 1,200 is to be repaid in 55 instalments of Rs.21.13 and last instalment would be paid on 5th October, 2022. The loan of Rs. 1,000 is to be repaid in 48 monthly installments of Rs. 20.83 as per the repayment schedule in equal monthly installments commencing from 05 January 2019. The last instalment would be repaid on 5 December 2022.

- Vehicle loans from Daimler financial services amoun�ng to Rs. 26.63 (31 March 2017: Rs. Nil, 1 April 2016: Rs. Nil) carrying interest rate in the range of 9.51% per annum to 11.00% per annum are secured against hypotheca�on of specific vehicle purchased out of the proceeds of those loans. The loans are to be repaid as per the respec�ve repayment schedule in equal monthly installments.

(c) Deposits from shareholders carrying interest rates in the range of 8.5% per annum to 12.5% per annum are repayable in 6 months to 3 years from the respec�ve dates of deposit.

(ii) Current Borrowings Note As at As at As at

31 March 2018 31 March 2017 1 April 2016

Loans repayable on demand

From banks (secured) (a) 1,451.62 247.72 1,092.57 From others (secured) (b) 300.00 300.00 -

Deposit from shareholders

From others (unsecured) (c) 23.98 28.72 104.01

Inter-corporate deposits from related par�es (d) 100.00 - -

(unsecured) (refer to note 39)

Buyers credit from banks (secured) (e) 379.82 273.81 213.21

2,255.42 850.25 1,409.79

Notes:

(a) Working capital borrowings from banks amoun�ng to Rs. 1,451.62 (31 March 2017: Rs. 247.72, 1 April 2016: Rs. 1,092.57) carrying interest rate varying from 9.10% per annum to 10.90% per annum are secured by hypotheca�on of stocks of stores and spares, raw materials and components, finished goods and stock-in-process and book debts and other assets of the Company (both present and future), on pari passu basis except packaging unit (KPAC) and are further secured by a second charge on the en�re fixed assets of the Company. These loans are also guaranteed by the Chairman & Managing Director of the Company and is repayable on demand.

(b) Working capital borrowings from others amoun�ng to Rs. 300.00 (31 March 2017: Rs. 300.00, 1 April 2016: Rs. Nil) carrying interest rate of 9.15% per annum are secured by first pari passu charge on current assets.

KDDL Limited

113


The loan is also personally guaranteed by the Chairman & Managing Director of the Company and is repayable on demand

(c) Deposits from shareholders amoun�ng to Rs. 23.98 (31 March 2017: Rs. 28.72, 1 April 2016: Rs. 104.01) carrying interest rates in the range of 8.5% per annum to 12.5% per annum are repayable in 6 months to 3 years from the respec�ve dates of deposit.

(d) Inter corporate deposits taken from Dream Digital Technology Limited amoun�ng to Rs. 100.00 (31 March 2017: Rs. Nil, 1 April 2016 : Rs. Nil) carrying interest rate of 9% p.a is repayable within one year.

(e) Buyers credit from Bank of India amoun�ng to Rs. 84.69 (31 March 2017: Rs. 79.81, 1 April 2016: Rs. Nil) carrying interest rate 6 month libor plus 0.75% is secured against hypotheca�on of inventory and receivables is repayable on demand. Buyers credit from IDBI amoun�ng to Rs. 295.13 (31 March 2017: Rs. 194.00, 1 April 2016: Rs. 77.07) carrying interest rate varying from 3 month libor plus 0.90% to 6 month libor plus 1.00% is secured against hypotheca�on of inventory and receivables is repayable on demand. Buyers credit from Corpora�on Bank amoun�ng to Rs. Nil (31 March 2017: Rs. Nil, 1 April 2016: Rs. 136.14) carrying interest rate varying from 6 month libor plus 1.17% to 6 month libor plus 1.59% is secured against hypotheca�on of inventory and receivables is repayable on demand.

(iii) Reconcilia�on of movements of liabili�es to cash flows arising from financing ac�vi�es

As at As at

31 March 2018 31 March 2017 Balance as at the beginning of the year 3,975.22 4,322.47 (including current and non-current borrowings) Proceeds from non-current borrowings* 2,340.27 1,608.15 Repayment of non-current borrowings* (1,127.31) (1,396.56) Proceeds from/repayments of current borrowings (net) 1,405.17 (559.54) Transac�on costs related to borrowings 4.33 0.48 Balance as at the end of the year 6,597.68 3,975.00 (including current and non-current borrowings)

* Non-current borrowings include current maturi�es of non-current borrowings

18 Other financial liabili�es Non-Current Current As at As at As at As at As at As at 31 March 31 March 1 April 31 March 31 March 1 April

2018 2017 2016 2018 2017 2016 Current maturi�es of non-current

borrowings [refer to note 17(i)] - - - 1,004.07 947.52 1,067.92 Interest accrued [refer to note 39(c)] - - - 174.58 132.20 144.42 Unpaid dividends* - - - 23.94 19.69 25.21 Capital creditors - - - 465.31 52.13 48.42 Employee related payables - - - 690.24 600.70 442.97 Security Deposit - from related par�es [refer to note 39] 6.77 16.31 6.77 - - - - from others 5.69 - - - - - 12.46 16.31 6.77 2,358.14 1,752.24 1,728.94 * not due for deposit to investor educa�on and protec�on fund

KDDL Limited

114


Non-Current Current

19 Provisions As at As at As at As at As at As at

31 March 31 March 1 April 31 March 31 March 1 April 2018 2017 2016 2018 2017 2016 Provisions for employee benefits (refer note 38) Liability for gratuity - - 140.95 28.51 48.50 37.00 Liability for compensated absences 172.29 145.86 132.00 44.85 30.42 22.17 172.29 145.86 272.95 73.36 78.92 59.17 Other provisions Provision for warran�es 20.89 12.55 8.85 5.26 3.58 2.15 20.89 12.55 8.85 5.26 3.58 2.15 193.18 158.41 281.80 78.62 82.50 61.32

Movement in other provisions Warran�es

Balance as on 1 April 2016 11.00

Provisions made during the period 7.29

Provisions u�lised during the period (2.15)

Balance as on 31 March 2017 16.14




A provision for warran�es is recognised when the underlying products are sold. The provision is based on historical informa�on on the nature, frequency and average cost of warranty claims and management es�mates regarding possible future incidence based on correc�ve ac�ons on product failures. The �ming of ou�lows will vary as and when the claim will arise. Any recovery of cost incurred in ne�ed off against the relevant cost.

20 Deferred tax liabili�es (net)

Deferred tax liability on As at As at As at


- Excess deprecia�on as per Income tax Act, 1961

over deprecia�on as per books 503.05 592.72 577.28

Deferred tax liability (A) 503.05 592.72 577.28

Deferred tax assets on - Expected credit loss allowance 1.98 3.04 3.14 - Provision for warran�es 7.61 5.58 3.80 - Provision for employee benefits 71.53 77.79 114.94 - Provision for bonus 43.62 49.87 52.09

Deferred tax assets (B) 124.74 136.28 173.97

Net deferred tax liabili�es (A - B) 378.31 456.44 403.31

KDDL Limited

115


(b) Movement in temporary differences: As at Recognised in Recognised As at

1 April 2016 Statement of in other 31 March Profit & Loss comprehensive 20172016-2017 Income

- Excess deprecia�on as per Income tax Act, 1961 577.28 15.44 - 592.72 over deprecia�on as per books

- Expected credit loss allowance (3.14) 0.10 - (3.04)

- Provision for warran�es (3.80) (1.78) - (5.58)

- Provision for employee benefits (114.94) 38.56 (1.42) (77.79)

- Provision for bonus (52.09) 2.22 - (49.87)

403.31 54.54 (1.42) 456.44

As at Recognised in Recognised As at

1 March 2017 Statement of in other 31 March

Profit & Loss comprehensive 2018

2017-2018 income

- Excess deprecia�on as per Income tax

- Act, 1961 over deprecia�on as per books 592.72 (89.67) - 503.05

- Expected credit loss allowance (3.04) 1.06 - (1.98)

- Provision for warran�es (5.58) (2.03) - (7.61)

- Provision for employee benefits (77.79) 18.34 (12.07) (71.53)

- Provision for bonus (49.87) 6.25 - (43.62)

456.44 (66.05) (12.07) 378.31

21 Trade payables As at As at As at


2018 2017 2016

Dues of Micro Enterprises and Small Enterprises (refer to note below) 42.56 72.70 45.07

Other trade payables 1,291.48 869.17 858.24

Other trade payables to related par�es (refer to note 39) 165.74 61.34 85.04

1,499.78 1,003.21 988.35

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008

which recommends that the Micro and Small Enterprises should men�on in their correspondences with its

customers the Entrepreneurs Memorandum Number as allocated a�er filing of the Memorandum. Accordingly,

the disclosure in respect of amounts payable to such enterprises as at the year end has been made in the financial

statements based on informa�on available with the Company as under :

KDDL Limited

116


Par�culars As at As at As at 31 March 31 March 1 April 2018 2017 2016

(a) The amounts remaining unpaid to micro, small and medium enterprises as at the end of the year - Principal 42.55 72.00 44.30 - Interest 3.94 0.69 0.44 (b) The amount of interest paid by the buyer as per the Micro - 0.77 - Small and Medium Enterprises Development Act, 2006 (c) The amounts of the payments made to micro and small suppliers 261.31 - - beyond the appointed day during each accoun�ng year (d) The amount of interest due and payable for the period (where the 3.49 - - principal has been paid but interest under the Micro Small and Medium Enterprises Development Act, 2006 not paid) (e) The amount of interest accrued and remaining unpaid at the end 0.45 0.69 0.77 of each accoun�ng year (f) The amount of further interest due and payable even in the - - - succeeding years, un�l such date when the interest dues as above are actually paid to the small enterprise, for the purpose

of disallowance as a deduc�ble expenditure under the Micro Small and Medium Enterprises Development Act, 2006

22 Other current liabili�es

Advance from customers 100.54 2.76 58.19

Statutory dues 172.62 121.20 104.52

Deferred revenue 2.25 2.76 5.16

275.41 126.72 167.87

23 Current tax liabili�es (net)

Provision for income tax (net of advance tax of 355.05 51.46 54.21

Rs. 1,155.99 (31 March 2017 Rs. 780.44, 1 April 2016: Rs. 318.74)) 355.05 51.46 54.21

KDDL Limited

117


24 Revenue from opera�ons

Sale of products 13,721.91 12364.87 (including excise duty to the extent applicable)

Sale of services 365.66 195.61

Other opera�ng revenues

Export incen�ves 288.65 254.09

Scrap sales 348.06 246.77

14,724.28 13,061.34

25 Other income

Interest income

Fixed deposits with banks 36.70 51.37

Interest income from related par�es (refer to note 39) 28.16 6.00

Interest income from others 18.64 61.36

Dividend income 14.63 24.05

Rental income 24.53 45.36

Liabili�es/ provision no longer required wri�en back 26.26 21.04

Exchange gain on foreign exchange fluctua�ons (net) 162.54 59.76

Net gain on sale of property, plant and equipment 160.61 0.50

Miscellaneous income 7.91 2.93

479.98 272.37

26 Cost of materials consumed

Inventory of material at the beginning of the year 1,135.36 1,153.93

Purchases of raw materials 3,965.31 2,909.93

5,100.67 4,063.86

Inventory of material at the end of the year 1,410.04 1,135.36

3,690.63 2,928.50

27 Changes in inventories of finished goods and work-in-progress

Opening stock

Work-in-progress 667.64 600.83

Finished goods 83.33 93.44

750.97 694.27 Less:

Closing stock



1,077.11 750.97

Add : Increase/(decrease) in excise duty on finished goods - (1.81)

(as applicable) (326.14) (58.51)



KDDL Limited

118


28 Employee benefits expense Salaries and wages 3,718.35 3,489.67 Contribu�ons to provident and other funds 331.88 302.68 Staff welfare expenses 214.42 150.57 4,264.65 3,942.92

29 Finance costs Interest expense on financial liabili�es measured 398.41 469.84

at amor�sed cost Other borrowing costs 84.81 81.73 483.22 551.57

30 Deprecia�on and amor�sa�on expense Deprecia�on on property, plant and equipment 714.92 684.85

(refer to note 3) Amor�sa�on of other intangible asset (refer to note 4) 25.25 40.29 740.17 725.14

31 Other expenses Stores and spares consumed 704.45 592.64

Power, fuel and water charges 387.88 334.90

Contractual labour expenses 540.68 366.48

Insurance 8.48 19.21

Rent (refer note 41) 208.91 216.87

Rates and taxes 13.10 22.15

Repair and maintenance 334.49 289.96

Legal and professional fees [refer note (a) below] 463.90 369.60

Travelling and conveyance 369.11 365.21

Job charges 509.20 375.68

Prin�ng and sta�onery 47.54 35.58

Communica�on expenses 53.47 64.80

Commission 149.48 191.43

Events and exhibi�ons 92.76 62.24

Property, plant and equipment wri�en off 2.90 3.85

Expected credit loss on trade receivables - 5.97

Dona�on 6.82 3.85

Advances / deposits wri�en off 0.41 0.80

Provision for warranty (refer note 19) 10.01 5.14

Directors' si�ng fees 5.40 5.40

Security service charges 78.93 73.84

Net change in fair value of financial assets (at FVTPL) - 2.62

Corporate social responsibility expenditure 21.60 18.00 [refer note (b) below]

Miscellaneous expenses 199.27 142.51

4,208.79 3,568.73

KDDL Limited



119


Note (a): Auditors’ remunera�on (excluding taxes as applicable)

As Auditor

- Statutory audit 10.00 10.50

- Tax audit 1.50 1.00

- Limited review of quarterly results 7.50 5.00

In other capacity

- Cer�fica�on work - 1.05

- Reimbursement of expenses 0.97 2.10

19.97 19.65

Note (b): Detail of corporate social responsibility expenditure

a. Amount required to be spent by the 20.99 17.67 Company during the year

b. Amount spent during the year (in cash)

(i) Construc�on / acquisi�on of any asset - -

(ii) On purpose other than (i) above* 21.60 18.00

21.60 18.00

*Out of contribu�on made, Rs. 15.50 (previous year Rs. 9.45) has been spent by the KDDL Ethos Founda�on on ac�vi�es prescribed under Sec�on 135 of the Companies Act, 2013.

32 Tax expense

A. Amounts recognised in statement of profit and loss

Current tax

Current year 659.06 343.90 Changes in es�mates related to prior years - 5.16 659.06 349.06 Deferred tax A�ributable to– Origina�on and reversal of temporary differences (66.04) 54.54 (66.04) 54.54 593.02 403.60

B. Reconcilia�on of effec�ve tax rate Profit before tax 1,999.94 1,155.26

Tax at the Indian tax rate of 34.61% (previous year 34.61%)* 692.14 399.81

Effect of expenses that are not deduc�ble in 17.46 6.57 determining taxable profit

Tax exempt income (55.58) -

Effect of reduc�on in tax rate (72.38) -

Others 11.38 (2.78)

Income tax expenses recognised in statement of profit and loss 593.02 403.60

KDDL Limited



120


* The tax rate used for the current year reconcilia�on above is the corporate tax rate of 34.61% (previous year

34.61%) payable by corporate en��es in India on taxable profits under the Indian tax law. Further, with effect

from 1 April 2018, applicable tax rate for financial year 2018-19 is 29.12% which is considered as the

substan�ally enacted rate used for deferred tax recogni�on.

C. Income tax recognised in other comprehensive income

Arising on income and expenses recognised in other comprehensive income

Remeasurement of defined benefit liability (asset) (42.21) (4.11)

(42.21) (4.11)

Bifurca�on of the income tax recognised in other comprehensive income

Items that will not be reclassified to profit or loss

Items that will be reclassified to profit or loss 12.07 1.42

12.07 1.42

33 Earnings per share

A. Basic earnings per share

i. Profit / (loss) for basic earning per share of Rs. 10 each


ii. Weighted average number of equity shares for (basic)

Balance at the beginning of the year 10,839,586 10,084,870

Effect of fresh issue of shares 5,118 228,483

10,844,704 10,313,353

Basic Earnings per share (face value of Rs 10 each) 12.97 7.29

B. Diluted earnings per share

i. Profit / (loss) for diluted earning per share of Rs. 10 each

Profit for the year 140,6.92 75,1.66

ii. Weighted average number of equity shares for (diluted)



Effect of employee stock op�ons* 11,238 8,858

10,855,942 10,322,211

Diluted Earnings per share (face value of Rs. 10 each) 12.96 7.28

* 9,762 op�ons (31 March 2017: 12,142 op�ons) were excluded from calcula�on of diluted weighted average

number of equity shares as their effect would have been an�-dilu�v.

KDDL Limited



121


Property, plant and equipment

Gross carrying amount as at 1 April 2016

Accumulated deprecia�on as at 1 April 2016

Deemed cost as at 1 April 2016

Freeholdland

82.63

-

82.63

Leasehold land

547.20

(0.61)

546.59

Buildings

1,443.83

(642.00)

801.84

Leaseholdimprovements

(19.44)

1.86

21.30

Plant andmachinery

(5,277.70)

4,010.50

9,288.20

Furnitureand fixtures

(438.13)

152.92

591.06

Officeequipment

(124.00)

49.90

173.90

Vehicles

(190.19)

149.41

339.60

Total

(6,692.07)

5,795.65

12,487.72

Other intangible assets

Gross carrying amount as at 1 April 2016Accumulated amor�sa�on as at 1 April 2016

Deemed cost as at 1 April 2016

Technicalknow-how

(66.78)

21.61

88.39

So�ware

(205.51)

63.20

268.71

Web portal

(59.96)

13.03

72.99

Total

(332.25)

97.84

430.09

KDDL Limited

34 Explana�on to transi�on to Ind AS

As stated in Note 2(a)(i), these are the Company's first financial statements prepared in accordance with Ind AS. For all periods up to and for the period ended 31 March 2017, the Company had prepared its financial statements in accordance with the Companies (Accounts) Rules, 2014, as no�fied under sec�on 133 of the Companies Act 2013, and other relevant provisions of the Act (Previous GAAP).

The accoun�ng policies set out in Note 2 have been applied in preparing these financial statements for the year ended 31 March 2018 including the compara�ve informa�on for the year ended 31 March 2017 and the opening Ind AS balance sheet on the date of transi�on i.e. 01 April 2016.

In preparing its Ind AS balance sheet as at 01 April 2016 and in presen�ng the compara�ve informa�on for the year ended 31 March 2017, the Company has adjusted amounts reported previously in financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Company in resta�ng its financial statements prepared in accordance with previous GAAP, and how the transi�on from previous GAAP to Ind AS has affected the Company's financial posi�on, financial performance and cash flows.

A. Op�onal exemp�ons availed

(i) Deemed cost for property, plant and equipment and intangible assets

Ind AS 101 permits a first-�me adopter to elect to con�nue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transi�on to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transi�on. This exemp�on can also be used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value. Informa�on rela�ng to gross carrying amount of assets and accumulated deprecia�on as on the transi�on date as per previous GAAP is as follows:

(ii) Investments in subsidiaries, associates and joint ventures

The Company has elected to measure its investments in subsidiaries, associates and joint ventures at the Previous GAAP carrying amount as its deemed cost on the date of transi�on to Ind AS.

(iii) Share-based payments

As permi�ed by Ind AS 101, the Company has elected not to apply Ind AS 102 Share-Based Payment, to equity instruments that vested prior to the date of transi�on to Ind AS.

122


B. Mandatory excep�ons

(i) Es�mates

As per Ind AS 101, an en�ty's es�mates in accordance with Ind AS at the date of transi�on to Ind AS (i.e. 1 April 2016) or at the end of the compara�ve informa�on period presented in the en�ty's first Ind AS financial statements (i.e. 31 March 2017), shall be consistent with es�mates made for the same date in accordance with previous GAAP unless there is objec�ve evidence that those es�mates were in error. However, the es�mates should be adjusted to reflect any difference in accoun�ng policies.

As per Ind AS 101, where applica�on of Ind AS requires an en�ty to make certain es�mates that were not required under previous GAAP, those es�mates should be made to reflect condi�ons that exist at the transi�on date or at the end of the compara�ve period.

The Company's es�mates under Ind AS are consistent with the above requirement. The key es�mates considered in prepara�on of financial statements that was not required under previous GAAP are listed below:

- Fair valua�on of financial instruments carried at FVTPL

- Determina�on of the discounted value for financial instruments carried at amor�sed cost

- Impairment of financial assets based on expected credit loss model

(ii) Classifica�on and measurement of financial assets

Ind AS 101 requires an en�ty to assess classifica�on of financial assets on the basis of the facts and circumstances exis�ng as on the date of transi�on. Further, the standard permits measurement of financial assets accounted at amor�sed cost based on facts and circumstances exis�ng at the date of transi�on if retrospec�ve applica�on is imprac�cable. Accordingly, the Company has determined the classifica�on of financial assets based on facts and circumstances that exist on the date of transi�on. Measurement of the financial assets accounted at amor�sed cost has been done retrospec�vely except where the same is imprac�cable.

(iii) De-recogni�on of financial assets and liabili�es

Ind AS 101 requires a first-�me adopter to apply the de-recogni�on provisions of Ind AS 109 prospec�vely for transac�ons occurring on or a�er the date of transac�on to Ind AS. However, Ind AS 101 allows a first �me adopter to apply the de-recogni�on requirements in Ind AS 109 retrospec�vely from the date of the en�ty’s choosing, provided that the informa�on needed to apply Ind AS 109 to financials assets and liabili�es derecognised as a result of past transac�on was obtained at the �me of ini�ally accoun�ng for those transac�ons.

As permi�ed by Ind AS 101, the Company has elected to apply the de-recogni�on provisions of Ind AS 109 prospec�vely from the date of transi�on to Ind AS.

KDDL Limited

123


C. Reconcilia�on of equity

Previous GAAP* Transi�on to

Ind AS

Ind AS Previous GAAP* Transi�on to

Ind AS

Ind AS

ASSETS

Non-current assets

Property, plant and equipment 5,795.65

-

5,795.65

6,093.50

-

6,093.50

Capital work-in-progress 256.54

-

256.54

458.55

-

458.55

Other intangible assets 97.84

-

97.84

66.28

-

66.28

Financial assets -

- Investments 3,237.51

14.05

3,251.56

4,801.53

33.08

4,834.61

- Loans 241.21

(39.89)

201.32

205.06

(34.87)

170.19

Current tax assets (net) 425.20

-

425.20

499.73

-

499.73

Other non-current assets 43.69

40.83

84.52

137.54

35.24

172.78

Total non-current assets 10,097.64

14.99

10,112.63

12,262.19

33.45

12,295.64

Current assets

Inventories 2,113.65 - 2,113.65 2,101.57 - 2,101.57

Financial assets

- Trade receivable 1,992.16 - 1,992.16 2,119.79 - 2,119.79 - Cash and cash equivalents 89.31

-

89.31

135.26

-

135.26

- Other bank balances 432.67

-

432.67

858.06

-

858.06

- Loans 126.53

-

126.53

153.39

-

153.39

- Other financial assets 116.79

-

116.79

97.93

-

97.93

Other current assets 603.71

-

603.71

540.06

-

540.06

Total current assets 5,474.82 - 5,474.82 6,006.06 - 6,006.06

Total assets 15,572.46 14.99 15,587.45 18,268.25 33.45 18,301.70

(d),(e)

(d),(e),(h)

Par�culars Note As at 1 April 2016 (Transi�on date) As at 31 March 2017

(a), (b), (c)

KDDL Limited

124


1,017.20 1,017.20 1,092.67 -

Total equity

Liabili�es

Non-current liabili�es


- Borrowings (h)

- Other financial liabili�es (i)

Provisions

Deferred tax liabili�es (net) (i)

Total non-current liabili�es

Current liabili�es


- Borrowings - Trade payables

- Other financial liabili�es

Other current liabili�es (a)

Provisions

Current tax liabili�es (net)

Total current liabili�es

Total liabili�es

Total equity and liabili�es

8,576.32

1,854.96

74.03

281.80

380.03

2,590.82

1,409.79 988.35

1,728.94 162.71

61.32

54.21

4,405.32

6,996.14

15,572.46

64.01

(10.20)

(67.26)

-

23.28

(54.18)

- -

-

5.16

-

-

5.16

(49.02)

14.99

8,640.33

1,844.76

6.77

281.80

403.31

2,536.64

1,409.79 988.35

1,728.94

167.87

61.32

54.21

4,410.48

6,947.12

15,587.45

11,531.24

2,187.17

100.51

158.41

427.30

2,873.39

850.25 1,003.21

1,752.24

123.96

82.50

51.46

3,863.62

6,737.01

18,268.25

95.47

(9.72)

(84.20)

-

29.14

(64.78)

-

-

-

2.76

-

-

2.76

(62.02)

33.45

* The previous GAAP figures have been reclassified to conform to Ind AS presenta�on requirements for the purpose of this note.

Previous GAAP* Transi�on to

Ind AS

Ind AS Previous GAAP* Transi�on to

Ind AS

Ind AS


KDDL Limited

125


EQUITY AND LIABILITIES

Equity

Equity share capital

Other equity

7,559.12

-

64.01 7,623.13 10,438.57 95.47

1,092.67

10,534.04 11,626.71

2,177.45

16.31

158.41

456.44

2,808.61

850.25

1,003.21

1,752.24

126.72

82.50

51.46

3,866.38

6,674.99

18,301.70

D. Reconcilia�on of total comprehensive income for the year ended 31 March 2017

NotePrevious GAAP* Transi�on to

Ind AS

Ind AS

Revenue from opera�ons (j) 12,541.24

520.10

13,061.34

Other income (a), (b), (e) 242.74

29.63

272.37

Total Income 12,783.98

549.73

13,333.71

Expenses

Cost of materials consumed 2,928.50

-

2,928.50

Excise duty on sales (j) -

520.10

520.10

Changes in inventories of finished goods and work in progress (58.51)

-

(58.51)

Employee benefits expense (f),(k) 3,949.79

(6.87)

3,942.92

Finance costs 551.57

-

551.57

Deprecia�on and amor�sa�on expense 725.14

-

725.14

Other expenses (c), (d), (h), (i) 3,576.42

(7.69)

3,568.73

Total Expenses 11,672.91

505.54

12,178.45

Profit before income tax 1,111.07

44.19

1,155.26

Income tax expense:

Current tax 343.90

-

343.90

Taxes for earlier years 5.16

5.16

Deferred tax (i) 47.26

7.28

54.54

Profit for the year 714.75

36.91

751.66

Other comprehensive income/(expense)

Items that will not be reclassified subsequently to profit or loss

Remeasurement of defined benefit liability (asset) (k) -

(4.11)

(4.11)

Income tax rela�ng to items that will not be reclassified to profit or loss

Income tax on remeasurement of defined benefit liability (asset) (k) -

1.42 1.42

Other comprehensive income/(expense) for the year - (2.69) (2.69)

Total comprehensive income for the year 714.75 34.22 748.97


Par�culars Year ended 31 March 2017

KDDL Limited

E. Adjustments to Cash Flow Statement

Other than effect of certain reclassifica�ons due to difference in presenta�on, there was no other material effect of cash flow from opera�ng, financing, inves�ng ac�vi�es for all periods presented.

Notes to reconcilia�on:

(a) Investments in equity shares of Subsidiary companies

Under the previous GAAP, Financial guarantees given by the Company for securing loan taken by subsidiaries were to be disclosed as an off balance sheet item. Under Ind AS, these guarantees are required to be measured at fair value.

126

-


Statement of Profit and Loss Year ended

31 March 2017

Net change in fair value of financial assets (at FVTPL) (2.62)

Adjustment before income tax - Profit / (loss) (2.62)

As at31 March 2017

As at1 April 2016

Asset: Investments (Non-current) (3.09) (0.47)

Adjustment to retained earnings (3.09) (0.47)

Increase/ (decrease)

Balance sheet

Statement of Profit and Loss Year ended31 March 2017

Other income: Dividend income 2.40 Adjustment before income tax - Profit / (loss) 2.40

As at31 March 2017

As at1 April 2016

Asset: Investments (Non-current) 14.52 14.52 Liabili�es: Deferred income (2.76) (5.16)Adjustment to retained earnings 11.76 9.36

Balance sheet


(b) Dividend on redeemable preference shares

Under the previous GAAP, the dividend from investment in 12% cumula�ve redeemable preference shares was to be recognised as and when received. Under Ind AS, such dividend is to be recognised as deemed equity investment even if not received by the Company. As at the date of transi�on, the deemed equity investment has been recognised a�er adjustment against retained earnings.


31 March 2017

Other income: Dividend income 21.65

Adjustment before income tax - Profit / (loss) 21.65

As at

31 March 2017

As at

1 April 2016

Asset: Investments (Non-current) 21.65 -

Adjustment to retained earnings 21.65 -


Balance sheet

KDDL Limited

The impact arising from the change is as follows:

(c) Investment in equity shares of other companies

Under Previous GAAP, the investments in equity shares of other companies were measured at cost or market value, whichever is lower. Under Ind AS, the Company has designated these investments at fair value through profit or loss (FVTPL). Accordingly, these investments are required to be measured at fair value. The impact arising from the change is as follows:

127


(d) Loans to employees

Under the previous GAAP, loans to employees are recorded at their transac�on value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the company has fair valued the loans to employees under Ind AS.



31 March 2017

Other expenses: Net change in fair value of financial assets (at FVTPL) -

Adjustment before income tax - Profit / (loss) -

As at

31 March 2017

As at

1 April 2016

Asset: Loans (12.80) (12.24)

Asset: Prepaid expense (other non-current assets) 14.68 14.12

Adjustment to retained earnings 1.88 1.88


Balance sheet

KDDL Limited

(e) Security deposit

Under the previous GAAP, interest free security deposits are recorded at their transac�on value. On transi�on to Ind AS, these security deposits are remeasured at amor�sed cost using the effec�ve interest rate method. The difference between the transac�on value of the deposit and amor�sed cost is regarded as prepaid rent and recognised as expenses uniformly over the lease period. Interest income, measured by the effec�ve interest rate method is accrued.


Adjustment to retained earnings (1.13) -


31 March 2017

Other income: Interest income from financial assets at amor�sed cost 5.58

Other expenses: Rent expense (6.71)


As at31 March 2017

As at1 April 2016

Asset: Loans (22.08) (27.65)



Balance sheet

(f) Employee stock op�ons outstanding reserve

Under the previous GAAP, the cost of equity-se�led employee share based plan were recognised using the intrinsic value method. Under Ind AS, the cost of equity se�led share based plan is recognised based on the fair value of the op�ons as at the grant date.

128


Statement of Profit and Loss

Year ended

31 March 2017

Other expenses 0.08


As at31 March 2017

As at1 April 2016

Asset: Other non-current assets (prepaid expense) (0.38) (0.94)

Liabili�es: Non-current Borrowings (9.72) (10.20)


Balance sheet



31 March 2017

Employee benefit expense (2.76)


As at

31 March 2017

As at

1 April 2016

Equity: Other equity (Share based payment reserve) 20.90 18.14

Adjustment to retained earnings (20.90)

(18.14)


Balance sheet

KDDL Limited


(g) Government grant

Under previous GAAP, the government grants rela�ng to property, plant and equipment were recognised as capital reserve. Under Ind AS, such grants are recognised as deferred income and credited to Statement of Profit and Loss on a systema�c basis over the useful life of asset. As at the date of transi�on, such grants have been adjusted against retained earnings. This has not resulted in any change in the total equity as at 31 March 2016 and 31 March 2017.


(h) Borrowings

Under Previous GAAP, the transac�on costs incurred towards origina�on of borrowings were charged to Statement of Profit and Loss as and when incurred. Under Ind AS, these transac�on costs are to be deducted from the carrying amount of borrowings on ini�al recogni�on. These costs are recognised in the Statement of Profit and Loss over the tenure of the borrowing by applying the effec�ve interest rate method.


As at

31 March 2017

As at

1 April 2016

Equity: Other equity (Investment subsidy) (55.00) (55.00)


Balance sheet

129


(i) Reversal of lease equalisa�on reserve

Under Previous GAAP, lease rentals on opera�ng leases were required to be recognised as expense on straight line basis over the lease term by recognising corresponding lease equalisa�on reserve. Under Ind AS, there is no such requirement unless specific circumstances as specified under Ind AS.


(j) Excise duty on sales

Under Previous GAAP, revenue from sale of goods was presented net of excise duty. Under Ind AS, excise duty is included in sale of goods and is separately presented as expense on the face of Statement of Profit and Loss. Thus, sale of goods under Ind AS has increased with a corresponding increase in expenses.



31 March 2017

Other expenses: Rent expense 16.94

Income-tax expense: Deferred tax charge/(credit) (5.86)


As at31 March 2017

As at1 April 2016

Liabili�es: Deferred lease rental 84.20 67.26

Liabili�es: Deferred tax liabili�es (net) (29.14) (23.28)



Balance sheet


31 March 2017

Revenue from opera�ons (520.10)

Excise duty 520.10



KDDL Limited

(k) Defined Benefit Plans

Under Ind AS, re-measurements i.e. actuarial gains and losses and the return on plan assets on the net defined benefit obliga�on are recognised in other comprehensive income instead of statement of profit and loss. Under the previous GAAP, these re-measurements were forming part of the profit or loss for the year. As a result of this change, actuarial loss (net of tax) amoun�ng to Rs. 2.69 (net of tax) has been recognised in other comprehensive income instead of profit or loss. There is no impact on the total equity as at 1 April 2016 and 31 March 2017.

130


F. Total equity reconcilia�on

Note

As at

31 March 2017

As at

1 April 2016

Reported earlier under Previous GAAP 11,531.24 8,576.32

Investment 30.32

8.89

Loan to employees 1.88

1.88

Security deposit (1.13)

-

Borrowings 9.34

9.26

Reversal of lease equalisa�on reserve 84.20

67.26

Deferred tax liabili�es (net) (29.14)

(23.28)

11,626.71

8,640.33

KDDL Limited

131


KDDL Limited

132

35 Financial instruments - Fair values and risk management A. Accoun�ng classifica�on and fair values The following table shows the carrying amounts and fair value of financial assets and financial liabili�es including their level in the fair value hierarchy:

Note

FVTPL FVOCI Amor�sed cost FVTPL FVOCI Amor�sed cost FVTPL FVOCI Amor�sed cost

Financial assetsNon-currentInvestments:

Investment in equity shares - subsidiary companies, associates and Joint ventures

(i) 3 -

-

6,557.30

- - 4,182.88 - -

Investment in equity shares - other companies (ii) 3 48.66

-

-

48.66 - - 51.28 -Investment in preference shares (iii) 3 -

-

153.07

- - 603.07 - -Loans (iii) 3 -

-

168.92

- - 170.19 - -

CurrentTrade receivable (iv) 3 -

-

2,856.17

- - 2,119.79 - -Cash and cash equivalents (iv) 3 -

-

180.15

- - 135.26 - -Other bank balances (iv) 3 -

-

672.96

- - 858.06 - -Loans (iv) 3 -

-

177.38

- - 153.39 - -Other financial assets (iv) 3 -

-

85.89

- - 97.93 - -

Total financial assets 48.66

-

10,851.84

48.66 - 8,320.57 51.28 -

Financial liabili�esNon-currentBorrowings (v) 3 - - 3,338.19 - - 2,177.45 - -Other financial liabili�es (iv) 3 - - 12.46 - - 16.31 - -

CurrentBorrowings (v) 3 - - 2,255.42 - - 850.25 - -Trade payables (iv) 3 - - 1,499.78 - - 1,003.21 - -Other financial liabili�es (iv) 3 - - 2,358.14 - - 1,752.24 - -

Total financial liabili�es - - 9,463.99 - - 5,799.46 - -

Level of

hierarchy


Note:

(i) The investments in subsidiary companies, associates and joint ventures are measured at cost less impairment losses.

(ii) The fair value in respect of the unquoted equity investments cannot be reliably es�mated. The Company has currently measured them at net book value as per the latest audited financial statements available.

(iii) Fair value of non-current financial assets has not been disclosed as there is no significant differences between carrying value and fair value.

(iv) Fair valua�on of financial assets and liabili�es with short term maturi�es is considered as approximate to respec�ve carrying amount due to the short term maturi�es of these instruments.

(v) The fair value of borrowings is based upon a discounted cash flow analysis that used the aggregate cash flows from principal and finance costs over the life of the debt and current market interest rates.

2,961.24

1,992.16

6,159.06

1,844.76

1,409.79

1,728.94

5,978.61

239.04201.32

89.31432.67126.53116.79

988.35

-

6.77

Par�culars Level

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

Non-current borrowings (including current maturi�es) 3 4,200.58 3,081.69 2,831.89 4,342.26 3,124.97 2,912.68

Reconcilia�on of Level 3 fair value measurement:

Opening balance 48.66 51.28Gain/ (loss) recognized in Statement of profit and loss - (2.62)Closing balance 48.66 48.66

There are no transfers between Level 1, Level 2 and Level 3 during the year ended 31 March 2018 and 31 March 2017.

Amor�sed cost

Year ended

31 March 2018

Year ended

31 March 2017

Fair value


B. Financial risk management

(i) Risk Management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to iden�fy and analyse the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to effect changes in market condi�ons and Company's ac�vi�es. The Company, through its training and management standards and procedures, aims to maintain discipline and construc�ve control environment in which all employees understand their roles and obliga�ons.

The Company’s audit commi�ee oversees how management monitors compliance with Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in rela�on to risk faced by the Company. The audit commi�ee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the result of which are reported to audit commi�ee.

The Company has exposure to the following risks arising from financial instruments:

-credit risk (see (ii))

- liquidity risk (see (iii))

- market risk (see (iv))

(ii) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obliga�ons. The carrying amount of financial assets represents the maximum credit risk exposure and arises principally from the Company's receivable from customers and loans.

Par�culars As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

Investments 6,759.03 4,834.61 3,251.56

Trade receivables 2,856.17 2,119.79 1,992.16

Loans 346.30 323.58 327.85

Cash and cash equivalents 180.15 135.26 89.31

Other bank balances 672.96 858.06 432.67

Other financial assets 85.89 97.93 116.79 10,900.50 8,369.23 6,210.34

KDDL Limited

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the payment and delivery terms and condi�ons are offered. The Company’s review includes external ra�ngs, if they are available, financial statements, credit agency informa�on, industry informa�on and business intelligence. Sale limits are established for each customer and reviewed annually. Any sales exceeding those limits require approval from the appropriate authority as per policy. In monitoring customer credit risk, customers are grouped according to their credit characteris�cs, including whether they are an individual or a legal en�ty, whether they are a ins�tu�onal, dealers or end-user customer, their geographic loca�on, industry, trade history with the Company and existence of previous financial difficul�es.

133


As at31 March 2018

As at31 March 2017

As at1 April 2016

Within India 1,380.13 1,047.63 923.56

Outside India 1,476.04 1,072.16 1,068.60

2,856.17 2,119.79 1,992.16

The Company’s exposure to credit risk for trade receivables by geographic region is as follows:

Par�culars Year ended

31 March 2018

Revenue from top customer 2,157.10 2,051.36 Revenue from top five customers 6,611.00 6,278.00

The following table gives details in respect of percentage of revenues generated from top customer and top five

customers:

The Company based on internal assessment which is driven by the historical experience/ current facts available in rela�on to default and delays in collec�on thereof, the credit risk for trade receivables is considered low. The Company es�mates its allowance for trade receivable using life�me expected credit loss. Individual receivables which are known to be uncollec�ble are wri�en off by reducing the carrying amount of trade receivable and the amount of the loss is recognised in the Statement of Profit and Loss within other expenses.

KDDL Limited

Year ended 31 March 2017

Par�culars Gross Carrying amount

Loss allowance Carrying amount

31 March 2018

Less than 6 Months 2,752.69 2,752.69More than 6 Months 110.28 6.80 103.48

2,862.97 6.80 2,856.1731 March 2017Less than 6 Months 2,107.20 - 2,107.20More than 6 Months 21.38 8.79 12.59

2,128.58 8.79 2,119.791 April 2016Less than 6 Months 1,963.64 - 1,963.64More than 6 Months 37.61 9.09 28.52

2,001.25 9.09 1,992.16

The following table provides informa�on about the exposure to credit risk and expected credit loss for trade receivables.

134

-

The movement in the allowance for impairment in respect of trade receivables and loans is as follows :

As at31 March 2018

Balance as at the beginning of the year 8.79 9.09 Amounts wri�en off (2.09) (1.61)Impairment loss recognised 0.10 1.31 Balance as at the end of the year 6.80 8.79

As at31 March 2017


Investments of surplus funds are made only with approved counterpar�es and within credit limits assigned to each counterparty. The limits are set to minimise the concentra�on of risks and therefore mi�gate financial loss through counterparty’s poten�al failure to make payments. Investments mainly include investments made by the Company in its subsidiary companies and associates. The loans primarily represents security deposits given and loans given to employees and related par�es. The management believes these to be high quality assets with negligible credit risk. The management believes the par�es to which these deposits and loans have been given have strong capacity to meet the obliga�ons and where the risk of default is negligible or nil and accordingly no provision for expected credit loss has been provided on these financial assets. Credit risk on cash and cash equivalents and bank deposits is limited as the Company generally invests in deposits with banks with high credit ra�ngs assigned by domes�c credit ra�ng agencies.

(iii) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in mee�ng the obliga�ons associated with its financial liabili�es that are se�led by delivering cash or another financial assets. The Company’s approach to manage liquidity is to have sufficient liquidity to meet its liabili�es when they are due, under both normal and stressed circumstances, without incurring unacceptable losses or risking damage to the Company’s reputa�on.

The Company believes that its liquidity posi�on, including total cash and cash equivalents and other bank balances an�cipated future internally generated funds from opera�ons will enable it to meet its future known obliga�ons in the ordinary course of business. However, if a liquidity needs were to arise, the Company believes it has access to financing arrangements, value of unencumbered assets, which should enable it to meet its ongoing capital, opera�ng, and other liquidity requirements. The Company will con�nue to consider various borrowing or leasing op�ons to maximize liquidity and supplement cash requirements as necessary.

KDDL Limited

135

The following table provides details regarding the contractual maturi�es of significant financial liabili�es:

Less than 1 Year 1 to 2 Years 2 to 5 Years Total

31 March 2018Borrowings (including current maturi�es) 2,255.42 3,342.70 6,602.19Trade payables 1,499.78 - 1,499.78Other financial liabili�es 2,358.14 - 2,358.14

6,113.34 3,342.70 10,460.1131 March 2017Borrowings (including current maturi�es) 850.25

2,167.73

3,965.20

Trade payables 1,003.21

-

1,003.21

Other financial liabili�es 1,752.24 - 1,752.243,605.70 2,167.73 6,720.95

1 April 2016Borrowings (including current maturi�es) 1,409.79 1,834.56 4,312.27Trade payables 988.35 - 988.35Other financial liabili�es 1,728.94 - 1,728.94

4,127.08

1,004.07--

1,004.07

947.52--

947.52

1,067.92--

1,067.92 1,834.56 7,029.56

(iv) Market Risk

Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk namely: currency risk and interest rate risk. The objec�ve of market risk management is to manage and control market risk exposures within acceptable parameters, while op�mising the return.


(i) Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s borrowings with floa�ng interest rates.

Exposure to interest rate risk

The Company is exposed to interest rate risk because funds are borrowed at both fixed and floa�ng interest rates. Interest rate risk is measured by using the cash flow sensi�vity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees and US dollars with a mix of fixed and floa�ng rates of interest. The risk is managed by the Company by maintaining an appropriate mix between fixed and floa�ng rate borrowings. The exposure of the Company’s borrowing to interest rate changes as reported to the management at the end of the repor�ng period are as follows:

KDDL Limited

As at31 March 2018

As at31 March 2017

As at31 March 2016

Fixed rate borrowings 5,150.57 3,717.78 3,219.70 Floa�ng rate borrowings 1,451.62

247.72 1,092.57

6,602.19

3,965.50 4,312.27

136

Interest rate sensi�vity analysis

A reasonably possible change of 0.50 % in interest rates at the repor�ng date would have affected the profit or loss by the amounts shown below. This analysis assumes that all other variables, in par�cular foreign currency exchange rates, remain constant

Strengthening WeakeningFor the year ended 31 March 2018Interest rate (0.5% movement) (7.26) 7.26

For the year ended 31 March 2017Interest rate (0.5% movement) (1.24) 1.24

Profit or Loss

(ii) Foreign currency risk

Foreign currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluctua�on in the prevailing foreign currency exchange rates on its financial posi�on and cash flows. Exposure arises primarily due to exchange rate fluctua�ons between the func�onal currency and other currencies from the Company’s opera�ng, inves�ng and financing ac�vi�es.

Unhedged foreign currency exposure


Total borrowings (gross of transation cost)

The following table provides details of the Company's exposure to currency risk:

KDDL Limited

Amount (Rs) Amount in foreign

currency


currency


currency

Trade receivablesHKD 7.77 0.95 5.38 0.65 4.00 0.47 USD 132.43 2.08 151.12 2.31 120.24 1.83 EUR 119.85 1.69 15.77 0.22 15.98 0.22

CHF 1,215.78 17.94 968.03 14.82 926.14 13.69 GBP 0.82 0.01 - - 0.50 0.01

Assets


Amount

(Rs)

Amount in foreign currency

Amount

(Rs)


BorrowingsUSD 379.82 5.73 273.81 Trade payablesHKD 13.67 1.64 23.65 USD 26.08 0.40 32.71 0.50 EUR 38.24 0.48 9.43 0.14 CHF 282.15 4.08 161.49 JPY - - 8.58 GBP 0.95 0.01 - SGD 4.07 0.08 -

Liabili�es

As at 31 March 2018 As at 31 March 2017

4.21

2.81

2.472.53

- -

Amount

(Rs)


213.21

31.61 30.79 10.02

344.85 0.75

- -

As at 1 April 2016

3.21

3.68 0.46 0.13 5.00 1.27

- -

Net exposure in respect of recognised assets and liabili�es 731.67 630.63 435.63

137

Significant forward contracts outstanding as at the end of the year


currency


currency

Amount (Rs)

Imports

CHF - - - - 424.75

Exports

CHF - - - - -

As at 31 March 2018 As at 1 April 2016As at 31 March 2017

Amount in foreign

currency

6.00

-

Sensi�vity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against below currencies at 31 March 2018 and 31 March 2017 would have affected the measurement of financial instruments denominated in foreign currency and affected Statement of Profit and Loss by the amounts shown below. This analysis is performed on foreign currency denominated monetary financial assets and financial liabili�es outstanding as at the year end. This analysis assumes that all other variables, in par�cular interest rates, remain constant and ignores any impact of forecast sales and purchases.


KDDL Limited

Par�culars

Strengthening Weakening Strengthening Weakening

31 March 2018

HKD (1% movement) 0.59 (0.59) (0.39) 0.39

USD (1% movement) 27.35 (27.35) (17.88) 17.88

EUR (1% movement) (8.16) 8.16 5.34 (5.34)

CHF (1% movement) (93.36) 93.36 61.05 (61.05)

GBP (1% movement) 0.13 (0.13) (0.08) 0.08

SGD (1% movement) 4.07 (4.07) (2.66) 2.66

31 March 2017

HKD (1% movement) 2.62 (2.62) (1.72) 1.72

USD (1% movement) 9.29 (9.29) (6.07) 6.07

EUR (1% movement) (0.58) 0.58 0.38 (0.38)

CHF (1% movement) (62.32) 62.32 40.75 (40.75)

JPY (1% movement) 0.08 (0.08) (0.05) 0.05

SEK (1% movement) - - - -

Profit or Loss Equity, net of tax

36 Capital Management

(i) Risk management

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.

The Company monitors capital using a ra�o of 'adjusted net debt' to 'total equity'. For this purpose, adjusted net debt is defined as total liabili�es, comprising interest-bearing loans and borrowings, less cash and cash equivalents and other bank balances. Total equity comprises all components of equity as shown in balance sheet.The Company's adjusted net debt to total equity ra�o was as follows:

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

Total liabili�es 10,744.56 6,674.99 6,947.12

Less: cash and cash equivalents and other bank balances 853.11 993.32 521.98

Adjusted net debt 9,891.45 5,681.67 6,425.14

Total equity 13,032.78 11,626.71 8,640.33

Net debt to total equity ra�o 0.76 0.49 0.74

Year ended

31 March 2018

Year ended

31 March 2017

195.71

151.28

330.10 195.71

(ii) Dividends

Equity shares Final dividend for the year ended 31 March 2017 of Rs. 1.50 (31 March 2016 of Rs. 1.50)

per fully paid equity shares

Dividend not recognised at the end of the repor�ng period In addi�on to the above dividends, since year end the directors have recommended

the payment of a final dividend of Rs. 2.50 (31 March 2017: Rs. 1.50) per fully paid equity share. This proposed dividend is subject to the approval of shareholders in the ensuing annual general mee�ng.


138

As at As at As at

31 March 31 March 1 April 2018 2017 2016

37 Con�ngent liabili�es and commitments: (to the extent not provided for)

(i) Claims against the Company not acknowledged as debts, under dispute

- Bank guarantees issued in favour of subsidiary 6,269.65 5,649.17 6,174.57

- Demand raised for service tax against which appeals have been filed 84.48 47.95 18.35

- Demand raised by Punjab State Electricity Board for payment of penalty 3.73 3.73 3.73

for usage of addi�onal power against sanc�oned load. Amount

paid under protest Rs. 3.73 (31 March 2017: Rs. 3.73, 1 April 2016: Rs. 3.73)

- Demand raised for Income tax (assessment year 2004-05 267.75 367.87 909.57

to assessment year 2012-13)

- Claims against the company filed by employees not acknowledged

as debt (to the extent ascertainable) 170.16 87.59 85.55

- Custom duty saved against EPCG Licenses, pending redemp�on 192.02 153.72 153.72

6,987.79 6,310.03 7,345.49

(ii) Commitments

- Es�mated amount of contracts remaining to be executed on 326.14 684.93 3.70

capital account (net of capital advances) and not provided for

- Amount payable under non-cancellable leases 952.78 1,179.82 292.10

1,278.92 1,864.75 295.80

(iii) In addi�on, the Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Company's management does not expect that these legal ac�ons, when ul�mately concluded and determined, will have a material and adverse effect on the Company's results of opera�ons or financial condi�on.

38 Employee benefits

A. Assets and liabili�es rela�ng to employee benefits As at

31 March 2018

As at

31 March 2017

As at As at

31 March 2018

1 April2016

1 April2016

As at As at

31 March 2017

Liability for gratuity -

-

28.51140.95

48.50 37.00 Liability for compensated absences 172.29

145.86

44.85132.00

30.42 22.17 172.29

145.86

73.36272.95

78.92 59.17

For details about the related employee benefit expenses, refer to note no. 28.

Non-Current Current

KDDL Limited

139


B. Defined Benefit Plan

The employees’ gratuity fund scheme managed by Life Insurance Corpora�on of India is a defined benefit plan. The present value of obliga�on is determined based on actuarial valua�on using the Projected Unit Credit Method, which recognises each period of service as giving rise to addi�onal unit of employee benefit en�tlement and measures each unit separately to build up the final obliga�on. The Company made annual contribu�ons to the LIC of India of an amount advised by the LIC.

The above defined benefit plan exposes the Company to following risks:

Interest rate risk:

The defined benefit obliga�on calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obliga�on will tend to increase.

Salary infla�on risk:

Higher than expected increases in salary will increase the defined benefit obliga�on.

Demographic risk:

This is the risk of variability of results due to unsystema�c nature of decrements that include mortality, withdrawal, disability and re�rement. The effect of these decrements on the defined benefit obliga�on is not straight forward and depends upon the combina�on of salary increase, discount rate and ves�ng criteria. It is important not to overstate withdrawals because in the financial analysis the re�rement benefit of a short career employee typically costs less per year as compared to a long service employee.

The Company ac�vely monitors how the dura�on and the expected yield of the investments are matching the expected cash ou�lows arising from the employee benefit obliga�ons. The Company has not changed the processes used to manage its risks from previous periods. The funds are managed by specialised team of Life Insurance Corpora�on of India.

(i) Funding

Gratuity is a funded benefit plan for qualifying employees. 100% of the plan assets are managed by LIC. The assets managed are highly liquid in nature and the Company does not expect any significant liquidity risks.

Par�culars As at As at As at 31 March 31 March 31 March 2018 2017 2016

(ii) Reconcilia�on of present value of defined benefit obliga�on

Present value of obliga�on at the beginning of the year 488.41 461.78 420.78Current Service cost 46.81 33.85 32.79Interest cost 39.07 36.94 33.58Benefits paid (31.13) (48.72) (52.45)Actuarial (gains) losses recognised in other comprehensive income

- experience adjustments 88.70 4.56 27.08

Present value of obliga�on at the end of the year 631.86 488.41 461.78

KDDL Limited

140



(iii) Reconcilia�on of the present value of plan assets

Plan assets at the beginning of the year, at fair value 439.90 283.83 227.26Return on plan assets recognised in other comprehensive income 35.20 22.71 19.30 Contribu�ons 112.89 181.65 89.72Benefits paid (31.13) (48.72) (52.45)Expenses deducted from the fund - - -Interest income 46.49 0.44 -

Plan assets at the end of the year, at fair value 603.35 439.91 283.83

(iv) Amount recognized in the balance sheet

Present value of the defined benefit obliga�ons at the end of the year 631.86 488.41 461.78Fair value of plan assets at the end of the year 603.35 439.91 283.83

Net liability recognized in the balance sheet* 28.51 48.50 177.95

* Shown under the head "Provision for employee benefits”

(v) Plan assetsPlan assets comprise of the following:Policy of insurance 603.35 439.91 283.83 603.35 439.91 283.83

(vi) Amount recognized in the Statement of Profit and Loss

Par�culars Year ended Year ended 31 March 2018 31 March 2017

Current service cost 46.81 33.85 Interest cost (net) 3.88 14.24

Amount recognized in the Statement of profit and loss 50.69 48.09

(vii) Remeasurements recognised in other comprehensive income

Actuarial gain/loss on the defined benefit obliga�on 88.70 4.56Return on plan assets excluding interest income (46.49) (0.45)

Amount recognized in other comprehensive income 42.21 4.11

(viii)Actuarial assump�ons

a) Economic assump�ons: The principal assump�ons are the discount rate and salary growth rate. The discount rate is generally based upon the market yield available on the Government bonds at the accoun�ng date with a term that matches that of the liabili�es and the salary growth rate takes account of infla�on, seniority, promo�on and other relevant factors on long term basis.

KDDL Limited

141



Discount rate (per annum) 8.00% 8.00% 8.00%

Expected rate of return on plan assets (per annum) 8.00% 8.00% 8.00%

Salary increase (per annum) 5.00% 5.00% 5.00%

Expected average remaining working lives of employees (years) 7.50 7.55 7.67

(b) Demographic assump�ons:

Re�rement age 58 years 58 years 58 years

Mortality Indian assured Indian assured Indian assured lives mortality lives mortality lives mortality

(2006-08) (2006-08) (2006-08)

A�ri�on rate Ul�mate Ul�mate Ul�mate

Upto 30 years 3% 3% 3%

31 to 44 years 2% 2% 2%

44 and above 1% 1% 1%

(ix) Sensi�vity analysis on defined benefit obliga�on on account of change in significant assump�ons:

Par�culars As at 31 march 2018 As at 31 march 2017 Increase Decrease Increase Decrease

Discount rate (1% movement) 35.09 (39.08) 45.97 (53.97)

Future salary growth (1% movement) (39.77) 36.32 (54.28) 47.15

The sensi�vity analysis above have been determined based on reasonably possible changes of the respec�ve assump�ons occurring at the end of the year and may not be representa�ve of the actual change. It is based on a change in the key assump�on while holding all other assump�ons constant. When calcula�ng the sensi�vity to the assump�on, the same method used to calculate the liability recognised in the Balance Sheet has been applied. The methods and types of assump�ons used in preparing the sensi�vity analysis did not change compared with the previous year.

(X) Expected future benefit payments

The expected maturity analysis of undiscounted defined benefit liability is as follows:

As at As at 31 March 2018 31 March 2017

Within 1 year 102.83 138.05 1-2 years 124.09 128.63 2-5 years 350.52 370.41 Over 5 years 1,737.04 1,860.24

KDDL Limited

142


Par�culars As at As at 31 March 2018 31 March 2017

(xi) Weighted average dura�on and expected employers contribu�on for next year of the defined benefit plan

Weighted average dura�on (in years) 5.87 10.23

Expected Employers contribu�on for the next year 133.33 172.00

C. Defined Contribu�on Plan

The Company makes contribu�on towards employees' provident fund, superannua�on fund and employees' state insurance plan scheme. Under the schemes, the Company is required to contribute a specified percentage of payroll cost, as specified in the rules of the scheme, to these defined contribu�on schemes. The expense recognised towards contribu�on of these plans is as follows:

Provident fund 160.05 135.99

Superannua�on fund 8.51 18.11

Employees' state insurance scheme 62.33 43.94

Pension fund 50.49 48.83

281.38 246.87

D. Share based payments

The Company has established an Employee Stock Op�on Plan (‘ESOP’) in accordance with the Securi�es and Exchange Board of India (Employee Stock Op�on Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (‘Guidelines’) which has been approved by the Board of Directors and the shareholders. A compensa�on commi�ee comprising promoter execu�ve and independent non-execu�ve members of the Board of Directors administer the ESOP. All op�ons under the ESOP are exercisable for equity shares. The Company planned to grant upto 110,000 op�ons to eligible employees and directors of the Company and subsidiaries of the Company. The outstanding op�ons as at 31 March 2018 are 21,000 (31 March 2017: 21,000, 1 April 2016: 24,750).

Fi�y percent of the op�ons which have been granted under ESOP 2011 were vested on 1 April 2014 (‘first tranche’). These op�ons were exercised by the employees and accordingly 39,750 shares were issued during the previous years to the eligible employees. The balance op�ons shall vest on the date when the turnover (excluding excise duty thereon) of the Company would exceed Rs. 15,000.00 (‘second tranche’). The exercise period for the op�ons is within six months from the date of ves�ng of the op�ons. Each op�on is exercisable for one equity share of Rs 10 each fully paid up on payment of exercise price of share determined with respect to the date of grant.

The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the op�on, the share price at grant date and expected price vola�lity of the underlying share, the expected dividend yield and the risk free interest rate for the term of the op�on. The fair value of the op�ons and the inputs used in the measurement of the grant-date fair values of the equity-se�led share based payment plan are as follows:

KDDL Limited

143


(i) Reconcilia�on of outstanding share op�ons

The number and weighted-average exercise prices of share op�ons under the share op�on plans are as follows.

(ii) Expense recognised in statement of profit and loss

The expenses arising from share-based payment transac�on recognised in statement of profit and loss as part of employee benefit expense / (income) for the year ended 31 March 2018 and 31 March 2017, were Rs. Nil and Rs. (2.76) respec�vely on account of expiry of share op�ons on resigna�on by certain employees.

(iii) The fair value of the op�ons has been determined under the Black-Scholes model and the inputs used in the measurement of the grant-date fair

Year ended Year ended 31 March 2018 31 March 2017

Fair value at grant date 61.05 61.05 Share price at grant date 133.90 133.90 Exercise Price 120.00 120.00 Risk Free interest rate (in %) 8.50% 8.50% Expected life (in months) 88 88 Expected vola�lity (in %)* 66.49% 66.49% Expected dividend Yield (in %) 1.58% 1.58%

*Expected vola�lity has been based on an evalua�on of the historical vola�lity of the Company’s share price, par�cularly over the historical period commensurate with the expected term.

39 Related par�es:

a) Related par�es and nature of rela�onship where control exists:

Name of party Descrip�on of rela�onship Pylania SA Subsidiary

Kamla Interna�onal Holdings SA Subsidiary Ethos Limited Subsidiary Mahen Distribu�on Limited Subsidiary Satva Jewellery and Design Limited* Subsidiary Cogni�on Digital LLP Subsidiary of Ethos Limited

Number of op�ons

Weighted Average

Exercise Price

Number of op�ons

Weighted Average Exercise Price

Outstanding at beginning of the year 21,000 120 24,750 120 Forfeited during the period -

-

(3,750)

120

Exercised during the period -

-

-

-

Outstanding at end of the year 21,000

120

21,000

120


KDDL Limited

144


(b) List of related par�es with whom transac�ons have taken place during the year

Kamla Tesio Dials Limited Associate Cadrafin GmbH Associate of Kamla Interna�onal Holdings SA

(c) Key managerial personnel (KMP) of the Company, their close family members and related en��es

(i) Names of KMP Names of their close family members**

- Mr. R.K. Saboo (Chairman) Mrs. Usha Devi Saboo (spouse),

(Chairman �ll 30 November 2016) Mr. Yashovardhan Saboo (son)

Mrs. Asha Devi Saboo (brother's spouse)

- Mr. Yashovardhan Saboo (Chairman and Managing Director) Mr. R.K. Saboo (father), Mrs. Anuradha Saboo (spouse) Mr. Pranav Shankar Saboo (Son), Mrs. Malvika Singh (son's spouse) Ms. Satvika Saboo (daughter)

- Mr. Sanjeev Kumar Masown Mrs. Neeraj Masown (spouse),

(Chief Financial Officer and Whole Time Director) Mr. Lal Chand Masown (father)

- Mr. Dinesh Agarawal (Chief Opera�ng Officer �ll 31 March 2016) M rs. Shashi Agarwal (spouse)

(ii) Related en��es of KMP

- Vardhan Proper�es & Investments Limited- Saboo Coa�ngs Private Limited- VBL Innova�ons Private Limited- Dream Digital Technology Limited- KDDL Ethos Founda�on- Saboo Ventures LLP- Tara Chand Mahendra Kumar HUF

(iii) Independent Directors- Mr. Anil Khanna- Mr. Jagesh Khaitan- Ms. Ranjana Agarwal- Mr. Praveen Gupta- Mr. Vishal Sa�nder Sood- Mr. Jai Vardhan Saboo- Mr. Sanjiv Sachar

*Satva Jewellery and Design Limited ('Satva') ceased to be joint venture of the Company and became wholly owned subsidiary of KDDL Limited pursuant to purchase of remaining shares of the other venturer in the joint venture vide agreement dated 23 December 2016. Accordingly, transac�ons during the year with Satva upto 23 December 2016 have been disclosed as transac�ons with joint venture and transac�ons incurred a�er 23 December 2016 have been disclosed as transac�ons with subsidiary company.

** With respect to the key managerial personnel, disclosure has been given for those rela�ves with whom the Company has made transac�ons during the year.

KDDL Limited

145



Subsidiaries Associates Joint Venture

Key Management

Personnel (KMP)

Related en��es of KMP

Other related par�es

1 Purchase of raw material and components

Pylania SA 14.29 - - - - -

Ethos Limited 10.04 - - - - -

Saboo Coa�ngs Private Limited - - - - 5.40 -

2 Sale of goods and services

Pylania SA 252.86 - - - - -


3 Purchase of fixed assets

Pylania SA 42.84 - - - - -

4 Sale of fixed assets

Pylania SA 11.99 - - - - -

Saboo Ventures LLP - - - - 173.04 -

5 Job work charges paid

Pylania SA 21.76 - - - - -

6 Rent paid by the Company

Mr. Yashovardhan Saboo - - -

28.64 - -

Mrs. Anuradha Saboo - - - - - 15.00

Kamla Tesio Dials Limited - 6.00 - - - -

Satva Jewellery & Design Limited 6.00 - - - - -


7 Salary of employees recovered


8 Compensa�on to key managerial personnel


Mr. Yashovardhan Saboo - - - 124.01 - -

Mr. Sanjeev Kumar Masown - - - 64.25 - -



c) Related party transac�ons

KDDL Limited

Mr. Sanjeev Kumar Masown - - - 5.09 -

Long term employee benefits

Mr. Yashovardhan Saboo - - - 18.00 -

- - - 3.80 -

9

- - - - 11.34

14.50 - - - -

- - - 2.32 -

-

-

-

-

-

-


Interest income

Vardhan Proper�es and Investment Limited

Satva Jewellery & Design Limited


146


KDDL Limited

10

- - - - 4.25

- - - - - 1.14

- - - 2.61 -

- - - - - 2.01

- - - - - 0.58

- - - - 4.02

- - - 5.12 -

-

-

-

-

- - - - - 2.87

- - - 7.40 - -

Interest paid/ accrued


Mrs. Asha Devi Saboo


Mrs. Neeraj Masown

Mr. Lal Chand Masown


Mr. Anil Khanna

Mrs. Alka Khanna

Ms. Ranjana Agarwal

Guarantee charges received

Pylania SA

Deposits from shareholders accepted





Mrs. Alka Khanna

Rent received

Ethos Limited

Saboo Coa�ngs Private Limited


Inter corporate deposit repaid to the Company


Repayment of loans given by the Company


12.77 - - - - -

12

- - - - - 4.23

- - - 20.00 - -

- - - - 17.00 -

- - - - - 10.00

- - - - - 1.00

12

13.26 - - - - -

- - - - 6.75 -

- - - - 0.20 -

13

- - - - 500.00 -

14

- - - 6.25 - -

11


Key Management

Personnel (KMP)



18 Investments made

Ethos Limited 2,250.58 - - - - -

19 Preference Share Redemp�on received


20 Inter Corporate Deposit Received

Dream Digital Technology Limited - - - - 100.00 -

15 Reimbursement of expenses paid by the Company

Pylania SA 123.88 - - - - -



16 Management consultancy fees paid


Mr. R.K. Saboo - - - - - 18.00

17 Reimbursement of expenses received by the Company

Kamla Tesio Dials Limited - 0.02 - - - -


Satva Jewellery & Design Limited 2.74 - - - - -


147

21 Inter Corporate Deposit Given

Vardhan Proper�es and Investment Limited - - - - 500.00 -




Key Management Personnel (KMP)

Related en��esof KMP


1 Purchase of raw material and componentsPylania SA 32.65

-

-

-

-

-

Ethos Limited 4.79

-

-

-

-

-

Saboo Coa�ngs Private Limited -

-

-

-

26.55

-


Pylania SA 51.45

-

-

-

-

-

Ethos Limited 6.12

-

-

-

-

-

Saboo Coa�ngs Private Limited - - - - 0.10 -3 Purchase of fixed assets

Ethos Limited 5.51 - - - - -4 Sale of fixed assets

Pylania SA 15.84

-

-

-

-

-


-

-

-

0.36

-

5 Job work charges paid

Pylania SA 7.35 - - - - -

KDDL Limited

22 CSR contribu�on made

KDDL Ethos Founda�on - - - - 15.50 -

23 Dividend paid

Shri R.K. Saboo a/c Tara Chand Mahendra Kumar HUF - - - - 1.05 -

Mr. R.K. Saboo - - - - - 29.72


Mrs. Usha Saboo - - - - - 6.77

Mrs. Anuradha Saboo - - - - - 5.76

Mr. Pranav S Saboo - - - - - 3.22

Others - - - - 0.97 -

Ms. Satvika Saboo - - - - - 2.04

Vardhan Proper�es and Investment Limited - - - - 0.24 -


Key Management

Personnel (KMP)



Mrs. Asha Devi Saboo - - - - - 0.46

Mr. Jagesh Khaitan - - - 0.01 - -

Mr. Sanjiv Sachar - - - 0.02 - -


Mr. Anil Khanna - - - 0.06 - -

Mrs. Alka Khanna - - - - - 0.00

24 Director Si�ng Fee

Mr. Jagesh Khaitan - - - 1.40 - -

Mr. Anil Khanna - - - 1.25 - -

Ms. Ranjana Agarwal - - - 0.95 - -

Mr. Praveen Gupta - - - 0.80 - -

Mr. Sanjiv Sachar - - - 0.85 - -

Mr. Jai Vardhan Saboo - - - 0.15 - -

148

Security deposit refunded25

Saboo Coa�ngs Private Limited - - - 9.54 - -


KDDL Limited


Saboo Coa�ngs Private Limited - - - - 7.68 -

Mr. R.K. Saboo - - - 4.00 - 2.00 Mr. Yashovardhan Saboo - - - 20.84 - - Mrs. Anuradha Saboo - - - - - 3.00 Mrs. Usha Saboo -

-

-

-

-

1.20

Satva Jewellery & Design Limited 1.50

-

4.50

-

-

-

7 Salary of employees recovered

Ethos Limited 1.33

-

-

-

-

-

8 Salary of employees paid


-

-

-

1.10

-

9 Directors remunera�on


Mr. R.K. Saboo -

-

-

29.89

-

-

Mr. Yashovardhan Saboo -

-

-

74.17

-

-

Mr. Sanjeev Kumar Masown -

-

-

46.44

-

-



-

-

10.00

-

-


-

-

3.43

-

-



-

-

7.26

-

-


-

-

2.31

-

-

10 Interest received


-

4.50

-

-

-

11 Interest paid/ accrued

Vardhan Proper�es and Investment Limited -

-

-

-

2.93

-


Mrs. Neeraj Masown - - - - - 1.05

Mr. Lal Chand Masown - - - - - 0.51

Mrs. Asha Devi Saboo - - - - - 1.25

149





12 Guarantee charges received

Pylania SA 2.05

-

-

-

-

13 Deposits from shareholders accepted

Mrs. Neeraj Masown -

-

-

-

15.00


-

4.20

-

-

Mr. Lal Chand Masown - - - - 2.00

Vardhan Proper�es and Investment Limited - - - 10.00 -

14 Repayment of deposits from shareholders

Mr. Sanjeev Kumar Masown - - 2.00 - - 15 Others including rent received

Ethos Limited 30.92

-

-

-

-


-

-

7.60

- Kamla Tesio Dials Limited - - - - -

-

-

-

-

-

-

- - 6.00


KDDL Limited







Pylania SA 0.80

-

-

-

-

Ethos Limited 12.80

-

-

-

-

Dream Digital Technology Limited -

-

-

1.65

-


-

-

2.28

-


1.33

-

-

-



-

-

19.80

-

Mr. R.K. Saboo -

-

-

-

12.00

18 Expenses recovered

Kamla Tesio Dials Limited -

-

-

-

-

Ethos Limited 12.82

-

-

-

-


-

-

5.72

-

VBL Innova�ons Private Limited -

-

1.95


-

-

24.70

-

19 Investments made

Mahen Distribu�on Limited 64.07

-

-

-

-

Ethos Limited 1,500.00

-

-

-

-

-

-

-

0.97

-

-

-

-

-

- - - - -


KDDL Ethos Founda�on -

-

-

-

18.00

- -

21 Security deposit received

Saboo Coa�ngs Private Limited - -- - 9.54 - -

150

As at 31 March 2018


Key Management

Personnel (KMP)

Related en��es

of KMP

Other related

par�es

1 Loans Satva Jewellery & Design Limited 103.94 - - - - - Mr. Sanjeev Kumar Masown - - - 36.24 - -

2 Trade receivables

Pylania SA 19.54

-

-

-

-

-



d) Balances due from/to the related par�es


-

-

-

-

-

4 Payables


5.96

-

-

-

-

Pylania SA 139.44

-

-

-

-

-


-

-

-

20.34

-

5 Guarantees taken*

Mr. R.K. Saboo - - - - - 1,485.80

Mr. Yashovardhan Saboo - - - 5,536.23 - -

22 Investments made in equity shares

Mahen Distribu�on Limited 64.03 - - - -

Ethos Limited 1,221.64

-

- - - - -

23 Investments made in preference shares



KDDL Limited

8 Deposits from shareholders

Mrs. Asha Devi Saboo -

-

-

-

-

10.00 Mr. Sanjeev Kumar Masown -

-

-

24.20

-

- Mr. Lal Chand Masown -

-

-

-

-

3.89

Mrs. Neeraj Masown -

-

-

-

-

16.23

Mr. Anil Khanna -

-

-

40.00

-

Mrs. Alka Khanna -

-

-

-

-

21.20

Ms. Ranjana Agarwal -

-

-

50.00

-

-


-

-

-

35.00

-

9 Inter Corporate deposit taken




151

6 Security deposit taken


-

-

2.00

-

-

7 Guarantees given

Ethos Limited 5,969.31 - - - - -

Pylania SA 300.34 - - - - -


Key Management

Personnel (KMP)

Related en��es

of KMP

Other related

par�es

As at 31 March 2017

1 Loans

Satva Jewellery & Design Limited 103.94 - - - - -Mr. Sanjeev Kumar Masown -

-

-

42.23

-

-


Ethos Limited 63.29

-

-

-

-

-


-

-

-

-

-


-

-

-

0.19

-

3 Payables


15.84

-

-

-

-


-

-

-

9.84

-

Pylania SA 29.47

-

-

-

-

-


-

-

-

6.18

-

4 Guarantees taken *

Mr. R.K. Saboo -

-

-

1,226.79

-

-


-

-

2,562.88

-

-


Key Management

Personnel (KMP)

Related en��es

of KMP

Other related

par�es


-

KDDL Limited



-

-

2.00

-

-

6 Guarantees given

Ethos Limited 5,473.64 - - - - -

Pylania SA 175.53 - - - - -


Mr. Sanjeev Kumar Masown - - - 4.20 - - Mr. Lal Chand Masown - - - - - 3.89 Mrs. Neeraj Masown - - - - - 15.00 Vardhan Proper�es and Investment Limited -

-

-

-

25.00

-

8 Interest accrued but not due on borrowings


-

-

0.28

-

- Mr. Lal Chand Masown -

-

-

-

-

0.53 Mrs. Neeraj Masown -

-

-

-

-

1.49


Ethos Limited 6.77


-

-

-

9.54

-

152


Key Management

Personnel (KMP)

Related en��es

of KMP

Other related

par�es

As at 1 April 2016


Key Management

Personnel (KMP)

Related en��es

of KMP

Other related

par�es

1 Loans

Satva Jewellery & Design Limited -

-

103.94

-

-


-

-

35.70

-


Ethos Limited 79.67 - - - -

Satva Jewellery & Design Limited - - 7.83 - -

Vardhan Proper�es and Investment Limited - - - - 0.72 Mr. Dinesh Agarawal - - - 8.00 -

3 Payables

Pylania SA 62.10

-

-

-

-


9.96

-

-

- Saboo Coa�ngs Private Limited -

-

-

-

4.61


-

-

-

8.37

4 Guarantees taken *

Mr. R.K. Saboo -

-

-

4,023.38

-


-

-

4,830.12

-



-

-

-

-

- -

-

- -

-

-

-

-


KDDL Limited

6 Guarantees given

Ethos Limited [refer note 32(c)] 5,985.87

-

-

-

-

Pylania SA 188.70

-

-

-

-



-

-

-

15.00


-

-

-

-

Mrs. Shashi Agarwal -

-

-

-

-


Ethos Limited 6.77

-

-

-

-

-

-

10.00

4.00

* Guarantees taken by the Company includes personal guarantees of Mr. R.K.Saboo and Yashovardhan Saboo for working capital borrowings and term loans. The original sanc�oned limits of working capital borrowings and term loans by the con�nuing banks has been disclosed above. However, at the repor�ng date, the sanc�oned limits of working capital borrowings and the balance amount of term loans in respect of which personal guarantees have been given stands at Rs. 1,739.24 (31 March 2017: Rs. 806.08, 1 April 2016: Rs. 2,167.17) of Mr. R.K.Saboo and Rs. 3,397.66 (31 March 2017: Rs 2,442.17, 1 April 2016: Rs. 2,973.90) of Mr. Yashovardhan Saboo.

e) Terms and condi�ons of transac�ons with related par�esAll transac�ons with related par�es are made on terms equivalent to those that prevail in arm’s length transac�ons and within the ordinary course of business.

153


Key Management

Personnel (KMP)

Related en��es

of KMP

Other related

par�es


40 Opera�ng segments

(a) Basis for segmenta�on

An opera�ng segment is a component of the Company that engages in business ac�vi�es from which it may earn revenues and incur expenses, including revenues and expenses that relate to transac�ons with any of the Company’s other components, and for which discrete financial informa�on is available. All opera�ng segments’ opera�ng results are reviewed regularly by the Company’s Chairman and Managing Director to make decisions about resources to be allocated to the segments and assess their performance.

The Company has three reportable segments, as described below, which are the Company's strategic business units. These business units offer different products and services, and are managed separately because they require different technology and marke�ng strategies. For each of the business units, the Company's Chairman and Managing Director reviews internal management reports on at least a quarterly basis.

The following summary describes the opera�ons in each of the Company's reportable segments: ______________________________________________________________________________________

Reportable segments Opera�ons ______________________________________________________________________________________

Precision and watch components Manufacturing and distribu�on of dials, watch hands and precision components

Others Manufacturing and distribu�on of packaging boxes

(b) Informa�on about reportable segments

Informa�on regarding the results of each reportable segment is included below. Performance is measured based on segment profit (before tax), as included in the internal management reports that are reviewed by the Company's Chairman and Managing Director. Segment profit is used to measure performance as management believes that such informa�on is the most relevant in evalua�ng the results of certain segments rela�ve to other en��es that operate within these industries. Inter-segment pricing is determined on an arm's length basis.

Year ended 31 March 2018 Precision and watch

components

Others Total

Segment revenue:

- External revenues 14,244.55 479.73 14,724.28 - Inter-segment revenue - - -

Total segment revenue 14,244.55 479.73 14,724.28

Segment profit (loss) before income tax 2,631.41 (24.31) 2,607.10

KDDL Limited

154


Segment profit (loss) before income tax includes:

- Interest expense 399.33 0.39 399.72

- Deprecia�on and amor�sa�on 676.17 7.41 683.57

Segment assets 14,768.68 309.90 15,078.58

Segment assets include:

- Capital expenditure during the year 2,495.42 102.17 2,597.59

Segment liabili�es 2,777.05 81.28 2,858.33


components

Others Total


components

Others Total

Segment revenue:

- External revenues 12,596.40 464.94 13,061.34

- Inter-segment revenue - - -

Total segment revenue 12,596.40 464.94 13,061.34

Segment profit (loss) before income tax 2,053.08 35.16 2,088.24

Segment profit (loss) before income tax includes:

- Interest expense 420.01 12.84 432.85

- Deprecia�on and amor�sa�on 648.85 12.09 660.94

Segment assets 11,172.86 235.71 11,408.57

Segment assets include:

- Capital expenditure during the year 1,112.29 - 1,112.29

Segment liabili�es 1,675.63 69.68 1,745.31

i. Revenues

Total revenue for reportable segments 14,724.28 13,061.34

Elimina�on of inter-segment revenue - -

Unallocated revenue - -

Total revenue 14,724.28 13,061.34

© ) Reconcilia�ons of informa�on on reportable segments to Ind AS measures

As at

31 March 2018

As at

31 March 2017

KDDL Limited

155


ii. Profit before income tax

Total profit before tax for reportable segments 2,607.10 2,088.24

Unallocated amounts:

Corporate expenses (607.16) (932.98)

Consolidated profit before tax 1,999.94 1,155.26

iii. Assets

Total assets for reportable segments 15,078.58 11,408.57

Unallocated amounts 8,698.76 6,893.14

Consolidated total assets 23,777.34 18,301.71

iv. Liabili�es

Total liabili�es for reportable segments 2,858.33 1,745.31

Unallocated amounts 910.21 498.02

Consolidated total liabili�es 3,768.54 2,243.33

v. Other material items

Reportable segment

total

Adjustments Consolidated totals


Interest expense 399.72 - 399.72

Deprecia�on and amor�sa�on expense 683.57 56.60 740.17

Capital expenditure during the year 2,597.59 99.47 2,697.06


Interest expense 432.85 - 432.85

Deprecia�on and amor�sa�on expense 660.94 64.21 725.15

Capital expenditure during the year 1,112.29 133.86 1,246.15

As at

31 March 2018

As at

31 March 2017

(d) Major customer

Revenue from two customers of the Company's Precision and watch components segment is Rs. 3,910.36 (Year ended 31 March 2017: Rs. 3,857.42) which individually cons�tute more than 10 percent of the Company's total revenue.

41 Opera�ng leases:

The Company has leased some of its premises and some of its fixed assets to a third party under a lease agreement that qualifies as an opera�ng lease. The Company is a lessee under various cancellable and non-cancellable opera�ng leases. The lease rental recognized in the Statement of Profit and Loss for the period in respect of the

aforemen�oned leases is Rs. 156.84 (31 March 2017: Rs. 227.10, 1 April 2016: Rs. 229.94). Expected future

KDDL Limited

156


minimum lease payments in respect of non-cancellable opera�ng leases are as follows:

Year ended Year ended Year ended


Payable in less than one year 170.48 187.21 56.77

Payable between one and five years 736.26 811.06 230.90

Payable a�er more than five years 46.04 181.55 4.43

42 The specified bank notes (SBN) as defined under the no�fica�on issued by the Ministry of Finance, Department of Economic dated 08 November, 2016 are no longer in existence. Hence the Company has not provided the corresponding disclosures as prescribed in Schedule III to the Companies Act, 2016. The disclosure of SBN made in the financial statements for 31 March 2017 is as follows:

*For the purpose of this disclosure, the term 'Specified Bank Notes' shall have the same meaning provided in the no�fica�on of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407 (E) dated 8 November 2016.

43 The Company has established a comprehensive system of maintenance of informa�on and documents as required by the transfer pricing regula�on under sec�ons 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such informa�on and documenta�on to be contemporaneous in nature, the Company con�nuously updates its documenta�on for the interna�onal transac�ons entered into with the associated enterprises during the financial year and expects such records to be in existence latest by the due date as required under law. The management is of the opinion that its interna�onal transac�ons are at arm’s length so that the aforesaid legisla�on will not have any impact on the financial statements, par�cularly on the amount of income tax expense and that of provision for taxa�on.

Par�culars SBNs* Other denomina�on

notes

Total

Closing cash in hand as on 8 November 2016 77.35 3.16 80.51

(+) Permi�ed receipts - 20.13 20.13

(-) Permi�ed payments - (17.00) (17.00)

(-) Amount deposited in Bank (77.35) - (77.35)

Closing cash in hand as on 30 December 2016 - 6.29 6.29

KDDL Limited

157


As at As at As at 31 March 31 March 31 March 2018 2017 2016

44 Disclosures pursuant to Sec�on 186 of the Companies Act, 2013: a) Loans and advances Loan to subsidiary (erstwhile joint venture): Satva Jewellery & Design Limited Balance as at the year end 103.94 103.94 103.94 Maximum amount outstanding at any �me during the year 103.94 103.94 103.94 (Satva Jewellery & Design Limited has u�lised the loan for mee�ng working capital requirements) b) Investment * Investment in subsidiary: Pylania SA Balance as at the year end 182.81 182.81 182.81

Maximum amount outstanding at any �me during the year 182.81 182.81 182.81 Investment in subsidiary: Ethos Limited Balance as at the year end 5,415.98 3,501.56 1,979.92

Maximum amount outstanding at any �me during the year 5,415.98 3,501.56 1,979.92 Investment in subsidiary: Mahen Distribu�on Limited

Balance as at the year end 698.07 698.07 634.04 Maximum amount outstanding at any �me during the year 698.07 698.07 634.04

Investment in subsidiary: Kamla Interna�onal Holdings SA Balance as at the year end 383.51 383.51 383.51

Maximum amount outstanding at any �me during the year 383.51 383.51 383.51 Investment in associate: Kamla Tesio Dials Limited Balance as at the year end 30.00 20.00 20.00 Maximum amount outstanding at any �me during the year 30.00 20.00 20.00 Investment in Company: Karolview Developers Private Limited Balance as at the year end 38.13 38.13 45.90 Maximum amount outstanding at any �me during the year 38.13 38.13 45.90 Investment in Company: Shivalik Waste Management Limited Balance as at the year end 10.53 10.53 5.28

Maximum amount outstanding at any �me during the year 10.53 10.53 5.28 c) Guarantees given Guarantees given to subsidiary: Ethos Limited Balance as at the year end 5,969.31 5,473.64 5,985.87 (Guarantees has been given for the purpose of borrowings taken by subsidiary company) Guarantees given to subsidiary: Pylania SA Balance as at the year end 300.34 175.53 188.70

(Guarantees has been given for the purpose of borrowings taken by subsidiary company)

KDDL Limited

*Investments are net off provision for diminu�on in the value of investment, other than temporary. As per our report of even date a�ached For and on behalf of the Board of Directors of KDDL Limited




158


KDDL Limited (Consolidated)

159

Independent Auditor's ReportTo the Members of KDDL Limited

1. Report on the Audit of Consolidated Ind AS Financial Statements

We have audited the accompanying consolidated Ind AS financial statements of KDDL Limited(hereina�er referred to as “the Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) and its associates, which comprise the Consolidated Balance Sheet as at 31 March 2018, the Consolidated Statement of Profit and Loss, the Consolidated Statement of Changes in Equity and the Consolidated Cash Flow Statement for the year then ended, including a summary of significant accoun�ng policies and other explanatory informa�on (hereina�er referred to as “the consolidated Ind AS financial statements”).

2. Management's Responsibility for the Consolidated Ind AS Financial Statements

The Holding Company's Board of Directors is responsible for the prepara�on of these consolidated Ind AS financial statements in terms of the requirements of the Companies Act, 2013 (hereina�er referred to as “the Act”) that give a true and fair view of the consolidated state of affairs, consolidated profit/loss and other comprehensive income, consolidated statement of changes in equity and consolidated cash flows of the Group including its associates in accordance with the accoun�ng principles generally accepted in India, including the Indian Accoun�ng Standards (“Ind AS”) specified under Sec�on 133 of the Act.

The respec�ve Board of Directors of the companies included in the Group and of its associates are responsible for maintenance of adequate accoun�ng records in accordance with the provisions of the Act for safeguarding the assets of the Group and its associates and for preven�ng and detec�ng frauds and other irregulari�es; the selec�on and applica�on of appropriate accoun�ng policies; making judgments and es�mates that are reasonable and prudent; and the design, implementa�on and maintenance of adequate internal financial controls, that were opera�ng effec�vely for ensuring the accuracy and completeness of the accoun�ng records, relevant to the prepara�on and presenta�on of the consolidated Ind AS financial statements that give a true and fair view and are free from material misstatement, whetherdue to fraud or error, which have been used for the purpose of prepara�on of the consolidated Ind AS financial statements by the Directors of the Holding Company, as aforesaid.

In preparing the consolidated Ind AS financial statements, the respec�ve Board of Directors of the companies included in the Group and of its associates are responsible for assessing the ability of the Group and of its associates to con�nue as a going concern, disclosing, as applicable, ma�ers related to going concern and using the going concern basis of accoun�ng unless management either intends to liquidate the Group or to cease opera�ons, or has no realis�c alterna�ve but to do so.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these consolidated Ind AS financial statements based on our audit. While conduc�ng the audit, we have taken into account the provisions of the Act, the accoun�ng and audi�ng standards and ma�ers which arerequired to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Audi�ng specified under Sec�on 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated Ind AS financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal

financial controls relevant to the Holding Company's prepara�on of the consolidated Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evalua�ng the appropriateness of the accoun�ng policies used and the reasonableness of the accoun�ng es�mates made, as well as evalua�ng the overall presenta�on of the consolidated Ind AS financial statements.

We are also responsible to conclude on the appropriateness of management's use of the going concern basis of accoun�ng and, based on the audit evidence obtained, whether a material uncertainty exists related to events or condi�ons that may cast significant doubt on the ability of Group and of its associates to con�nue as a going concern. If we conclude that a material uncertainty exists, we are required to draw a�en�on in the auditor's report to the related disclosures in the consolidated Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or condi�ons may cause Group and its associates to cease to con�nue as a going concern.

We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph 5 (b) of the Other Ma�ers paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements.

4. Opinion

In our opinion and to the best of our informa�on and according to the explana�ons given to us and based on the considera�on of reports of other auditors on separate financial statements and on the other financial informa�on of the subsidiaries and associates, the aforesaid consolidated Ind AS financial statements give the informa�on required by the Act in the manner so required and give a true and fairview in conformity with the accoun�ng principles generally accepted in India, of the consolidated state of affairs of the Group and its associates as at 31 March 2018, and their consolidated profit and other comprehensive income, consolidated statement of changes in equity and consolidated cash flows for the year ended on that date.

5. Other Ma�ers

(a) The compara�ve financial informa�on of the Group, its associates and a joint venture (�ll 23 December 2016) for the year ended 31 March 2017 and the transi�on date opening balance sheet as at 1 April 2016 included in these consolidated Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accoun�ng Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31 March 2017 and 31 March 2016 dated 30 May 2017 and 30 May 2016 respec�vely expressed an unmodified opinion on those consolidated financial statements, as adjusted for the differences in the accoun�ng principles adopted by the Group, an associate and a joint venture (�ll 23 December 2016) its associates on transi�on to the Ind AS, which have been audited by us.

(b) We did not audit the financial statements of fivesubsidiaries, whose financial statements reflect total assets of Rs.3,697.33 lakhs and net assets of Rs. 1,914.15lakhs as at 31 March 2018, total revenues ofRs. 2,503.21 lakhs and net cash inflows amoun�ng to Rs. 104.02 lakhs for the year ended on that date, as considered in the consolidatedInd AS financial statements. The consolidated Ind AS financial statements also include the Group's share of net profit of Rs.0.28lakhs for the year ended 31 March 2018, as considered in the consolidated Ind AS financial statements, in respect of an associate, whose financial statements have not been audited by us. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and an associate, and our report in terms of sub-sec�on (3) of Sec�on 143 of the Act, insofar as it relates to the aforesaid subsidiaries and an associate, is based solely on the reports of the other


160

auditors.

Two of these subsidiaries are located outside India whose financial statements and other financial informa�on have been prepared in accordance with accoun�ng principles generally accepted in their respec�ve countries and which have been audited by other auditors under generally accepted audi�ng standards applicable in their respec�ve countries. The Holding Company's management has converted the financial statements of such subsidiaries located outside India from accoun�ng principles generally accepted in their respec�ve countries to accoun�ng principles generally accepted in India. We have audited these conversion adjustments made by the Holding Company's management. Our opinion in so far as it relates to the balances and affairs of such subsidiaries located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Holding Company which have been audited by us.

(c) The consolidated financial statements also include the Group's share of net loss of Rs. 2.90 lakhs for the year ended 31 March 2018, as considered in the consolidated financial statements, in respect of an associate whose financial informa�on have not been audited by us. These financial informa�on is unaudited and have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of this associate, and our report in terms of sub-sec�ons (3) of Sec�on 143 of the Act in so far as it relates to the aforesaid associate, is based solely on such unaudited financial informa�on. In our opinion and according to the informa�on and explana�ons given to us by the Management, these financial informa�on are not material to the Group.

Our opinion above on the consolidated Ind AS financial statements, and our report on Other Legal and Regulatory Requirements below, isnot modified in respect of the above ma�ers with respect to our reliance on the work done and the reports of the other auditors.

6. Report on Other Legal and Regulatory Requirements

As required by Sec�on 143 (3) of the Act, based on our audit and on the considera�on of report of the other auditors on separate financial statements and the other financial informa�on of subsidiaries and an associates, which are companies incorporated in India, as noted in the 'Other Ma�ers' paragraph, we report, to the extent applicable, that:

a) We have sought and obtained all the informa�on and explana�ons which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated Ind AS financial statements.

b) In our opinion, proper books of account as required by law rela�ng to prepara�on of the aforesaid consolidated Ind AS financial statements have been kept so far as it appears from our examina�on of those books and the reports of the other auditors.

c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, the Consolidated Statement of Changes in Equity and Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of prepara�on of the consolidated Ind AS financial statements.

d) In our opinion, the aforesaid consolidatedInd AS financial statements comply with the Ind ASspecified under Sec�on 133 of the Act.

e) On the basis of the wri�en representa�ons received from the directors of the Holding Company as on 31 March 2018 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its subsidiary companies and an associate,which are companies incorporated in India, none of the directors of the Group companies and its associate,which are companiesincorporated


161

in India, is disqualified as on 31 March 2018 from being appointed as a director of that company in terms of Sec�on 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Holding Company, its subsidiary companies and an associate, which are companies incorporated in India and the opera�ng effec�veness of such controls, refer to our separate report in “Annexure A”. As per the Board of Directors of one subsidiary company, in view of the MCA No�fica�on No. G.S.R. 583 (E) dated 13 June 2017, the respec�ve company is exempt form the requirements of clause (i) of sec�on 143 (3) and therefore the report on adequacy and opera�ng effec�veness of internal financial controls is not being made as per the report of the other auditor on which we have relied upon.

g) With respect to the other ma�ers to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditor's) Rules, 2014, in our opinion and to the best of our informa�on and according to the explana�ons given to us and based on the considera�on of the report of the other auditors on separate financial statements and also the other financial informa�on of the subsidiaries and an associates, which are companies incorporated in India, as noted in the 'Other Ma�er' paragraph:

(i) The consolidated Ind AS financial statements disclose the impact of pending li�ga�ons on the consolidated financial posi�on of the Group and its associates – Refer Note 42to the consolidated Ind AS financial statements.

(ii) The Group and its associates did not have any material foreseeable losses on long-term contracts including deriva�ve contracts during the year ended 31 March 2018.

(iii) There has been no delay in transferring amounts to the Investor Educa�on and Protec�on Fund by the Holding Company and its subsidiary companies and an associate, which are companies incorporated in India, during the year ended 31 March 2018.

(iv) The disclosures in the consolidated Ind AS financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made since they do not pertain to the financial year ended 31 March 2018. However, amounts as appearing in the audited consolidated financial statements for the period ended 31 March 2017 have been disclosed. Refer to note 45 of the consolidated Ind AS financial statements.

For B S R &Co. LLP Chartered Accountants Firm Registra�on No.: 101248W/W-100022


162


Annexure A referred to in paragraph 6(f) to the Independent Auditor's report to the Members of the Company being report on the Internal Financial Controls under Clause (i) of Sub-sec�on 3 of Sec�on 143 of the Act

In conjunc�on with our audit of the consolidated Ind AS financial statements of KDDL Limited (“the Holding Company”) as of and for the year ended 31 March 2018, we have audited the internal financial controls with reference to consolidated Ind AS financial statements of the Holding Company, its subsidiary companies and an associate, which are companies incorporated in India, as of that date. As per the Board of Directors of one subsidiary company, in view of the MCA No�fica�on No. G.S.R. 583 (E) dated 13 June 2017, the respec�ve subsidiary company is exempt from the requirements of clause (i) of sec�on 143 (3) and therefore the report on adequacy and opera�ng effec�veness of internal financial controls is not being made as per the report of the other auditor on which we have relied upon

Management's Responsibility for Internal Financial Controls

The respec�ve Board of Directors of the Holding Company, its subsidiary companies and an associate, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal controls with reference to financial statements criteria established by the Company considering the essen�al components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Repor�ng (the 'Guidance Note') issued by the Ins�tute of Chartered Accountants of India ('ICAI'). These responsibili�es include the design, implementa�on and maintenance of adequate internal financial controls that were ope ra�ng effec�vely for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the preven�on and detec�on of frauds and errors, the accuracy and completeness of the accoun�ng records, and the �mely prepara�on of reliable financial informa�on, as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls with reference to consolidated Ind AS financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Audi�ng, issued by ICAI and deemed to be prescribed under sec�on 143 (10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to consolidated Ind AS financial statements was established and maintained and if such controls operated effec�vely in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to consolidated Ind AS financial statements and their opera�ng effec�veness. Our audit of internal financial controls with reference to consolidated Ind AS financial statements included obtaining an understanding of internal financial controls with reference to consolidated Ind AS financial statements, assessing the risk that a material weakness exists, and tes�ng and evalua�ng the design and opera�ng effec�veness of internal controls based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors of the subsidiary companies and an associate, which are companies incorporated in India, in terms of their reports referred to in the Other Ma�ers paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial control with reference to consolidated Ind AS financial statements is a process designed to provide reasonable assurance regarding the reliability of financial repor�ng and the prepara�on of


163

financial statements for external purposes in accordance with generally accepted accoun�ng principles. A company's internal financial control with reference to consolidated Ind AS financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transac�ons and disposi�ons of the assets of the company; (2) provide reasonable assurance that transac�ons are recorded as necessary to permit prepara�on of consolidated Ind AS financial statements in accordance with generally accepted accoun�ng principles, and that receipts and expenditures of the company are being made only in accordance with authorisa�ons of management and directors of the company; and (3) provide reasonable assurance regarding preven�on or �mely detec�on of unauthorised acquisi�on, use, or disposi�on of the company's assets that could have a material effect on the consolidated Ind AS financial statements.

Inherent Limita�ons of Internal Financial Controls with reference to consolidated Ind AS Financial Statements

Because of the inherent limita�ons of internal financial controls with reference to consolidated Ind AS financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projec�ons of any evalua�on of the internal financial controls with reference to consolidated Ind AS financial statements to future periods are subject to the risk that the internal financial control with reference to consolidated Ind AS financial statements may become inadequate because of changes in condi�ons, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Holding Company, its subsidiary companies and an associate, which are companies incorporated in India have in all material respects, an adequate internal financial controls system with reference to consolidated Ind AS financial statements and such internal financial controls with reference to consolidated Ind AS financial statements were opera�ng effec�vely as at 31 March 2018, based on the essen�al components of internal control stated in the Guidance Note issued by the ICAI.

Other Ma�ers

Our aforesaid report under sec�on 143(3)(i) of the Act on the adequacy and opera�ng effec�veness of the internal financial controls with reference to consolidated Ind AS financial statements insofar as it relates to two subsidiary companies and an associate which are companies incorporated in India, is solely based on the corresponding reports of the auditors of such companies incorporated in India.

Our opinion is not modified in respect of the above ma�er.

For B S R &Co. LLP Chartered Accountants Firm Registra�on No.: 101248W/W-100022


Annexure A referred to in paragraph 6(f) to the Independent Auditor's report to the Members of the Company being report on the Internal Financial Controls under Clause (i) of Sub-sec�on 3 of Sec�on 143 of the Act


164

Consolidated Balance sheet as at 31 March 2018(All amounts are in Indian Rupees Lakhs, except for share data)

NotesAs at

31 March 2018As at

1 April 2016

Non-current assetsProperty, plant and equipment 3 8,361.36 7,796.68 7,697.81 Capital work-in-progress 3 2,419.14 481.25 295.24 Other intangible assets 4 83.54 107.32 152.23 Equity accounted investees 5 28.35 28.06 52.58 Financial assets - Investments 6 48.66 48.66 51.28 - Loans 7 1,060.62 856.84 957.00 - Other financial assets 8 224.32 85.86 168.17 Income tax asset (net) 9 622.97 709.59 604.65 Deferred tax assets (net) 10 495.52 527.85 284.92 Other non-current assets 11 696.43 648.86 572.04 Total non-current assets 14,040.91 11,290.97 10,835.92

Current assetsInventories 12 20,115.42 19,020.26 18,638.98 Financial assets - Trade receivables 13 3,264.21 2,613.63 2,363.63 - Cash and cash equivalents 14 1,127.60 1,156.35 617.77 - Other bank balances 15 672.96 867.32 450.36 - Loans 7 444.30 403.01 471.46 - Other financial assets 8 41.30 31.70 96.48 Other current assets 16 3,290.87 729.07 837.14 Total current assets 28,956.66 24,821.34 23,475.82 Total assets 42,997.57 36,112.31 34,311.74

Equity and Liabili�esEquity Equity share capital 17 1,103.99 1,092.67 1,017.20 Other equity 18 12,094.83 9,643.40 7,627.31 Equity a�ributable to owners of the Company 13,198.82 10,736.07 8,644.51 Non-controlling interests 39 2,966.27 3,511.52 3,282.41 Total equity 16,165.09 14,247.59 11,926.92

Liabili�esNon-current liabili�esFinancial liabili�es - Borrowings 19 4,597.47 3,627.21 3,294.68 - Other financial liabili�es 20 5.69 9.55 -Provisions 21 335.42 278.57 359.50 Deferred tax liabili�es (net) 10 378.32 456.44 403.31 Total non-current liabili�es 5,316.90 4,371.77 4,057.49

Current liabili�esFinancial liabili�es - Borrowings 19 6,354.26 5,943.03 6,815.89 - Trade payables 22 8,627.21 7,160.89 7,760.40 - Other financial liabili�es 20 4,783.87 3,058.25 2,780.70 Other current liabili�es 23 1,250.22 1,193.85 852.63 Provisions 21 81.32 85.47 63.50 Current tax liabili�es (net) 24 418.70 51.46 54.21 Total current liabili�es 21,515.58 17,492.95 18,327.33 Total liabili�es 26,832.48 21,864.72 22,384.82 Total equity and liabili�es 42,997.57 36,112.31 34,311.74 Significant accoun�ng policies 2Notes to the Consolidated Ind AS financial statements 3-48

165


As at31 March 2017Assets

The accompanying notes form an integral part of the consolidated Ind AS financial statementsAs per our report of even date a�ached

For B S R & Co. LLP For and on behalf of the Board of Directors of KDDL LimitedChartered Accountants Firm registra�on no. : 101248W/W-100022

Pravin Tulsyan Yashovardhan Saboo S anjeev MasownPartner Chairman and Managing Director Chief Financial Officer and Whole �me DirectorMembership no. 108044 DIN: 00012158 DIN: 03542390

Raman SoodPlace : Gurugram, Haryana Place : Gurugram, Haryana Company SecretaryDate : 14 May 2018 Date : 14 May 2018 Membership No. F3722

Consolidated Statement of Profit and Loss for the year ended 31 March 2018(All amounts are in Indian Rupees Lakhs, except for share data)

NotesYear ended

31 March 2018Year ended

31 March 2017

Revenue from opera�ons 25 50,318.03 45,843.59 Other income 26 522.29 455.39 Total income 50,840.32 46,298.98 ExpensesCost of materials consumed 27 3,764.43 3,000.49 Excise duty on sales 143.22 520.10 Purchases of stock-in-trade 28 27,240.22 25,655.33 Changes in inventories of finished goods, 29 (815.43) (436.15)stock-in-trade and work-in-progress Employee benefits expense 30 6,663.04 6,047.67 Finance costs 31 1,202.92 1,430.67 Deprecia�on and amor�sa�on expense 32 1,213.25 1,160.66 Other expenses 33 8,901.65 8,567.68 Total expenses 48,313.30 45,946.45 Profit before share of equity accounted investees and income tax 2,527.02 352.53 Share of profit of equity accounted investees (net of income tax) 5 (2.61) 5.38 Profit before income tax 2,524.41 357.91 Income tax expense: 34 - Current tax - Current year 743.44 348.84 - Changes in es�mates related to previous year - 5.16 - Deferred tax (36.08) (181.57)Total income tax expense 707.36 172.43 Profit for the year 1,817.05 185.48 Other comprehensive income / (expense)Items that will not be reclassified subsequently to profit or loss:

Remeasurement of defined benefit liability / (asset) (35.45) (26.13)Income tax on remeasurement of defined benefit liability / (asset) 9.71 8.23Items that will be reclassified subsequently to profit or loss:

Exchange differences on transla�on of foreign opera�ons 44.60 (43.42)Income tax on exchange differences on transla�on of foreign opera�ons - - Other comprehensive income / (expense) for the year (net of income tax) 18.86 (61.32)

Total comprehensive income for the year (net of income tax) 1,835.91 124.16 Profit a�ributable to:Owners of the Company 1,712.14 210.44 Non-controlling Interest 104.91 (24.95)Profit for the year 1,817.05 185.49 Other comprehensive income / (expense) a�ributable to:Owners of the Company 12.00 (52.33)Non-controlling Interest 6.86 (8.99)Other comprehensive income / (expense) for the year 18.86 (61.32)Total comprehensive income / (expense) a�ributable to:Owners of the Company 1,724.14 158.11 Non-controlling Interest 111.77 (33.94)Total comprehensive income for the year 1,835.91 124.16 Earnings per share [nominal value of share Rs. 10 (previous year Rs. 10)] Basic (Rs.) 35 16.75 1.76 Diluted (Rs.) 16.73 1.76 Significant accoun�ng policies 2Notes to the consolidated Ind AS financial statements 3-48

166


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Cash flow from opera�ng ac�vi�es

Profit before income tax 2,524.41 357.91

Adjustments for :

Deprecia�on and amor�sa�on expenses 1,213.25 1,160.66

Net gain on sale of property, plant and equipment (160.61) (0.19)

Fixed assets wri�en off (net) 40.30 71.36

Advances / deposits wri�en off 56.25 2.26

Expense on employee stock op�on scheme 11.76 19.82

Finance cost 1,202.92 1,430.67

Interest income (180.36) (197.19)Dividend income 0.23 -

Provisions no longer required wri�en back (98.28) (61.76)Expected credit loss on trade receivables - 5.97

Net change in fair value of financial assets (at FVTPL) - 2.62

Effect of exchange rates on transla�on of opera�ng cashflows 38.21 (37.19)

Opera�ng cash flow before working capital changes 4,648.08 2,754.94

Changes in working capital:

(Increase)/ decrease in loans (153.25) 249.60

(Increase) / decrease in other financial assets (2.80) 74.19

(Increase) / decrease/ in other non-current assets 35.67 115.47

(Increase) in inventories (1,095.16) (381.27)

(Increase) in trade receivables (650.58) (249.39)

(Increase)/ decrease in other current assets (2,618.05) 115.05 Increase / (decrease) in provisions 17.25 (85.09)Increase / (decrease) in trade payables 1,564.60 (553.56)Increase in other financial liabili�es 42.28 179.49 Increase in other current liabili�es 16.17 332.65

Cash generated by opera�ng ac�vi�es 1,804.21 2,552.07

Income tax (paid), net (289.58) (461.69)

Net cash generated from opera�ng ac�vi�es (A) 1,514.63 2,090.38

Cash flow from inves�ng ac�vi�es

Acquisi�on of property, plant and equipment (including capital advances) (3,407.35) (1,695.91)

Proceeds from sale of property, plant and equipment 248.69 31.15

Subscrip�on (net) paid/received on acquisi�on/ 81.19 (37.14)dives�ture of interest in subsidiaries

Movement in other bank balances 60.15 (340.17)

Interest received 81.74 106.78

Dividend received 0.23 -

Net cash (used) in inves�ng ac�vi�es (B) (2,935.35) (1,935.29)

168


Consolidated Cash Flow Statement for the year ended 31 March 2018(All amounts are in Indian Rupees Lakhs, except for share data)

Cash flow from financing ac�vi�es

Proceeds from issue of share capital (inlcuding premium) 225.00 2,250.79

Share issue expenses - (10.10)

Proceeds from non-current borrowings 4,348.08 1,643.97

Repayment of non-current borrowings (2,319.88) (1,215.23)

Proceeds from/repayments of current borrowings (net) 475.67 67.59 Finance Cost paid (1,076.75) (1,413.08)

Dividend paid (162.60) -

Tax on dividend (33.11) -

Net cash flow provided by financing ac�vi�es (C) 1,456.41 1,323.94

Net (decrease) / increase in cash and cash equivalents (A+B+C) 35.69 1,479.03

Cash and cash equivalents at the beginning of period (see below) (4,016.83) (5,495.86)

Cash and cash equivalents at the end of period (see below) (3,981.14) (4,016.83)

Notes:

1. Components of cash and cash equivalents:

Balances with banks in current accounts 516.01 946.88

Remi�ances-in-transit 108.14 -

Cheques, dra�s on hand 166.39 43.77

Cash on hand 103.39 103.21

Credit cards receivable 233.67 62.49

Bank overdra� (5,108.74) (5,173.18)

(3,981.14) (4,016.83)

2. The above cash flow statement has been prepared under the indirect method set out in the applicable Indian Accoun�ng Standard (Ind AS) 7 on "Statement of Cash Flow". Also, refer to note 2(q).

3. Refer note 19(iii) for reconcilia�on of movements of liabili�es to cash flows arising from financing ac�vi�es.

Significant accoun�ng policies 2Notes to the consolidated Ind AS financial statements 3-48

169




Consolidated Cash Flow Statement for the year ended 31 March 2018(All amounts are in Indian Rupees Lakhs, except for share data)






1. Repor�ng en�ty

KDDL Limited ('the Company' or 'the Parent Company'), is a public limited Company domiciled in India. The Company is listed on BSE Limited and Na�onal Stock Exchange (NSE) of India Limited. These consolidated Ind AS financial statements comprise the Company and its subsidiaries (referred to collec�vely as the 'Group') and the Group's interest in associates. The Group is primarily engaged in the business of manufacturing dials, watch hands and precision components and trading of watches, accessories and luxury items.

2. Significant accoun�ng policies

a) Basis of prepara�on

i) Statement of compliance

These consolidated Ind AS financial statements have been prepared in accordance with Indian Accoun�ng Standards (Ind AS) as per the Companies (Indian Accoun�ng Standards) Rules, 2015 and the Companies (Indian Accoun�ng Standards) Amendment Rules, 2016 no�fied under sec�on 133 of Companies Act, 2013, (the 'Act') and other relevant provisions of the Act.

The Group's consolidated financial statements upto and for the year ended 31 March 2017 were prepared in accordance with the Companies (Accounts) Rules, 2014.

As these are Group's first consolidated financial statements prepared in accordance with Indian Accoun�ng Standards (Ind AS), Ind AS 101, First �me adop�on of Indian Accoun�ng Standards has been applied. The transi�on was carried out from Indian Accoun�ng Principles generally accepted in India as prescribed under Sec�on 133 of the Act, which was the previous GAAP. An explana�on of how the transi�on to Ind AS has affected the previously reported financial posi�on, financial performance and cash flow of the Group is provided in Note 36.

The consolidated Ind AS financial statements were authorized for issue by the Company's Board of Directors on 14 May 2018.

ii) Func�onal and presenta�on currency

The func�onal currency of the Group is the Indian rupee. These consolidated Ind AS financial statements are presented in Indian rupees. All amounts have been rounded-off to the nearest lakhs, up to two places of decimal, unless otherwise indicated.

iii) Basis of measurement

The consolidated Ind AS financial statements have been prepared on the historical cost basis except for the following items:

Items Measurement basis _________________________________________________________________________________________

Certain financial assets and liabili�es Fair value (including deriva�ve instruments)

Net defined benefits (assets)/liability Fair value of the plan assets less present value of defined benefits obliga�ons

_________________________________________________________________________________________

iv) Use of es�mates and judgments

The prepara�on of consolidated Ind AS financial statements in conformity with Generally Accepted Accoun�ng Principles (GAAP) requires management to make judgments, es�mates and assump�ons that affect the applica�on of accoun�ng policies and the reported amounts of assets, liabili�es, income and expenses and the disclosure of con�ngent liabili�es on the date of the consolidated Ind AS financial statements. Actual results could differ from those es�mates. Es�mates and underlying assump�ons are reviewed on an ongoing basis. Any revision to accoun�ng es�mates is recognised prospec�vely in current and future periods.

In par�cular, informa�on about significant areas of es�ma�on uncertainty and cri�cal judgments in applying accoun�ng policies that have the most significant effects on the amounts recognised in the consolidated Ind AS

170

Notes to the Consolidated Ind AS Financial Statements for the year ended 31 March 2018

financial statements is included in the following notes:

- Note 2 (a) (v) - Fair value measurement

- Note 2(c) and 3 – Assessment of useful life of Property, plant and equipment;

- Note 2(c) and 4 – Assessment of useful life of Intangible assets;

- Note 2(g), 2 (h), 20 and 40 – Recogni�on and measurement of provision and con�ngencies, key assump�ons about the likelihood and magnitude of an ou�low of resources;

- Note 2(m), 9 and 34 – Recogni�on fo tax expense including deferred tax, availability of future taxable profit against which tax losses carried forward cab be used

- Note 2(p)(ii) – Impairment test of non-financial assets: key assump�ons underlying recoverable amounts;

- Note 2(p)(I) - Impairment of financial assets and

- Note 41 Measurement of defined benefit obliga�ons: key actuarial assump�ons; Shared based payments.

v) Measurement of fair values

A number of the Group's accoun�ng policies and disclosures require measurement of fair values, for both financial and non-financial assets and liabili�es. The Group has an established control framework with respect to measurement of fair values. This includes the top management division which is responsible for overseeing all significant fair value measurements, including Level 3 fair values. The top management division regularly reviews significant unobservable inputs and valua�on adjustments. If third party informa�on, is used to measure fair values, then the top management division assesses the evidence obtained from the third par�es to support the conclusion that these valua�ons meet the requirement of Ind AS, including the level in the fair value hierarchy in which the valua�ons should be classified.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valua�on techniques as follows:

- Level 1: quoted prices (unadjusted) in ac�ve markets for iden�cal assets and liabili�es.

- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

When measuring the fair value of an asset or liability, the Group uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its en�rely in the same level of the fair value hierarchy as the lowest level input that is significant to the en�re measurement.

The Group recognises transfers between levels of the fair value hierarchy at the end of the repor�ng period during which the changes have occurred.

Further informa�on about the assump�ons made in measuring fair values used in preparing these consolidated Ind AS financial statements is included in the respec�ve notes.

b) Basis of consolida�on

The consolidated Ind AS financial statements comprises the financial statement of the Group, and the en��es controlled by the Group including its subsidiaries as at 31 March 2018. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

- Power over the investee (i.e. exis�ng rights that give it the current ability to direct the relevant ac�vi�es of the investee)


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- Exposure, or rights, to variable returns from its involvement with the investee, and

- The ability to use its power over the investee to affect its returns.

Generally, there is a presump�on that a majority of vo�ng rights result in control. To support this presump�on and when the Group has less than a majority of the vo�ng or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

- The contractual arrangement with the other vote holders of the investee.

- Rights arising from other contractual arrangements

- The Group's vo�ng rights and poten�al vo�ng rights

- The size of the Group's holding of vo�ng rights rela�ve to the size and dispersion of the holdings of the other vo�ng rights holders.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Consolidated Ind AS financial statements are prepared using uniform accoun�ng policies for like transac�ons and other events in similar circumstances. If a member of the Group uses accoun�ng policies other than those adopted in the consolidated Ind AS financial statements for like transac�ons and events in similar circumstances, appropriate adjustments are made to that Group member's financial statements in preparing the consolidated Ind AS financial statements to ensure conformity with the Group's accoun�ng policies.

The details of the consolidated en��es are as follows: _________________________________________________________________________________________

S.No. Name Country of Percentage of Incorpora�on ownership

_________________________________________________________________________________________

1. Pylania SA * Switzerland 85.00 % 2. Kamla Interna�onal Holdings SA Switzerland 100.00 % 3. Ethos Limited** India 78.68 % 4. Mahen Distribu�on Limited India 100.00 % 5. Satva Jewellery and Design Limited India 100.00 % 6. Cogni�on Digital LLP India 100.00% 7. Kamla Tesio Dials Limited India 30.00 % 8. Cadrafin Sari Switzerland 22.00%

* Includes 47.25% (31 March 2017: 47.25%, 1 April 2016: 47.25%) held through Kamla Interna�onal Holdings SA ** Includes 18.68% (31 March 2017: 18.56%, 1 April 2016: 18.56%) held through Mahen Distribu�on Limited

Consolida�on procedure

(i) Business Combina�ons

Business combina�ons are accounted for using the acquisi�on accoun�ng method as at the date of the acquisi�on, which is the date at which control is transferred to the Group. The considera�on transferred in the acquisi�on and the iden�fiable assets acquired and liabili�es assumed are recognised at fair values on their acquisi�on date. Goodwill is ini�ally measured at cost, being the excess of the aggregate of the considera�on transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net iden�fiable assets acquired and liabili�es assumed. The Group recognises any non-controlling interest in the acquired en�ty on an acquisi�on-by-acquisi�on basis either at fair value or at the non-controlling interest's propor�onate share of the acquired en�ty's net iden�fiable assets. Considera�on transferred does not include amounts related to se�lement of pre-exis�ng rela�onships. Such amounts are recognised in the Statement of Profit and Loss. Transac�on costs are expensed as incurred, other than those incurred in rela�on to the issue of


172


debt or equity securi�es. Any con�ngent considera�on payable is measured at fair value at the acquisi�on date. Subsequent changes in the fair value of con�ngent considera�on are recognised in the Statement of Profit and Loss.

In accordance with Ind AS 101 provisions related to first �me adop�on, the Group has elected to apply Ind AS accoun�ng for business combina�ons prospec�vely from 1st April, 2016. As such, Previous GAAP balances rela�ng to business combina�ons entered into before that date, including goodwill, have been carried forward as at the date of transi�on to Ind AS.

(ii) Subsidiaries

Subsidiaries are en��es controlled by the Group. The Group controls an en�ty when it is exposed to, or has rights to, variable returns from its involvement with the en�ty and has the ability to affect those returns through its power over the en�ty. The financial statements of subsidiaries are included in the consolidated Ind AS financial statements from the date on which control commences un�l the date on which control ceases.

(iii) Non-controlling interests (NCI)

NCI are measured at their propor�onate share of the acquiree's net iden�fiable assets at the date of acquisi�on.

Non-controlling interests in the net assets (excluding goodwill) of consolidated subsidiaries are iden�fied separately from the Group's equity. NCI are measured at their propor�onate share of the acquiree's net iden�fiable assets at the date of acquisi�on.

Subsequent to acquisi�on, the carrying amount of non-controlling interests is the amount of those interests at ini�al recogni�on plus the non-controlling interests' share of subsequent changes in equity. Total comprehensive income is a�ributed to non-controlling interests even if it results in the non-controlling interest having a deficit balance.

(iv) Loss of control

When the Group loses control over a subsidiary, it derecognises the assets and liabili�es of the subsidiary, and any related NCI and other components of equity. Any interest retained in the former subsidiary is measured at fair value at the date the control is lost. Any resul�ng gain or loss is recognised in Statement of Profit and Loss.

(v) Equity accounted investees

The Group's interests in equity accounted investees comprise interests in associates and joint ventures.

An associate is an en�ty in which the Group has significant influence, but not control or joint control, over the financial and opera�ng policies. A joint venture is an arrangement in which the Group has joint control and has rights to the net assets of the arrangement, rather than rights to its assets and obliga�ons for its liabili�es.

Interests in associates and joint ventures are accounted for using the equity method. They are ini�ally recognised at cost which includes transac�on costs. Subsequent to ini�al recogni�on, the consolidated Ind AS financial statements include the Group's share of profit or loss and OCI of equity-accounted investees un�l the date on which significant influence or joint control ceases.

(vi) Transac�ons eliminated on consolida�on

Intra-group balances and transac�ons, and any unrealised income and expenses arising from intra-group transac�ons, are eliminated. Unrealised gains arising from transac�ons with equity accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(vii) Foreign currency transac�ons

Transac�ons in foreign currencies are translated into the respec�ve func�onal currencies of Group companies at the exchange rates at the dates of the transac�ons or an average rate if the average rate approximates the actual rate at the date of the transac�on.

Monetary assets and liabili�es denominated in foreign currencies are translated into the func�onal currency at


173


the exchange rate at the repor�ng date. Non-monetary assets and liabili�es that are measured at fair value in a foreign currency are translated into the func�onal currency at the exchange rate when the fair value was determined. Non-monetary assets and liabili�es that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transac�on. Exchange differences are recognised in Statement of Profit and Loss.

(viii) Foreign opera�ons

The assets and liabili�es of foreign opera�ons (subsidiaries, associates, joint arrangements, branches) including goodwill and fair value adjustments arising on acquisi�on, are translated into Indian Rupees, the func�onal currency of the Group, at the exchange rates at the repor�ng date. The income and expenses of foreign opera�ons are translated into Indian Rupees at the exchange rates at the dates of the transac�ons or an average rate if the average rate approximates the actual rate at the date of the transac�on.

Such exchange differences are recognised in OCI and accumulated in equity (as exchange differences on transla�ng the financial statements of a foreign opera�on), except to the extent that the exchange differences are allocated to NCI.

When a foreign opera�on is disposed of in its en�rety or par�ally such that control, significant influence or joint control is lost, the cumula�ve amount of exchange differences related to that foreign opera�on recognised in OCI is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes of part of its interest in a subsidiary but retains control, then the relevant propor�on of the cumula�ve amount is re-allocated to NCI. When the Group disposes of only a part of its interest in an associate or a joint venture while retaining significant influence or joint control, the relevant propor�on of the cumula�ve amount is reclassified to profit or loss.

c) Property, plant and equipment ('PPE')

Recogni�on and measurement

Items of PPE are measured at cost of acquisi�on or construc�on which includes capitalised finance costs less accumulated deprecia�on and/or accumulated impairment loss, if any.

Cost of an item of PPE comprises its purchase price, including import du�es and non-refundable purchase taxes, a�er deduc�ng trade discounts and rebates, any directly a�ributable cost of bringing the item to its working condi�on for its intended use and es�mated costs of dismantling and removing the item and restoring the site on which it is located.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labour, any other costs directly a�ributable to bringing the item to working condi�on for its intended use, and es�mated costs of dismantling and removing the item and restoring the site on which it is located.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Capital work-in-progress comprises the cost of fixed assets that are not ready for their intended use at the repor�ng date. Advances paid towards acquisi�on of PPE outstanding at each Balance sheet date, are shown under other non-current assets.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in the Statement of Profit and Loss.


On transi�on to Ind AS, the Group has elected to con�nue with the carrying value of all of its property, plant and equipment as at 1 April 2016, measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment as on 1 April 2016.


174



Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

Deprecia�on

Deprecia�on is calculated on cost of items of PPE less their es�mated residual values over their es�mated useful lives using the straight-line method and is recognised in the Statement of Profit and Loss.

Deprecia�on on items of PPE is provided as per rates corresponding to the useful life specified in Schedule II to the Companies Act, 2013 read with the no�fica�on dated 29 August 2014 of the Ministry of Corporate Affairs

The es�mated useful lives of items of property, plant and equipment for the current and compara�ve periods are as follows:

_________________________________________________________________________________________ Par�culars Useful life as per Schedule II Management es�mate of useful life

_________________________________________________________________________________________

Buildings – factory 30 Years 30 Years

Plant and equipment 3 - 15 Years 3 - 15 Years

Furniture and fi�ngs 10 Years 10 Years

Office equipment 5 Years 5 Years

Vehicles 8 Years 8 Years

Deprecia�on on leasehold land and improvements carried out on buildings taken on lease is provided over the period of the lease or useful life of assets, whichever is lower.

Deprecia�on on the property, plant and equipment of the Group's foreign subsidiary Pylania SA has been provided on straight-line method based on the es�mated useful life of assets using the rates stated as follows:

_________________________________________________________________________________________

Par�culars Rate _________________________________________________________________________________________

Buildings – Factory 1.5% to 8.5% Plant and machinery 10% to 15% Office equipment 8.5% to 15% Motor vehicles 48%

In view of the Deprecia�on method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Based on technical evalua�on and consequent advice, the management believes that its es�mates of useful lives as given above best represent the period over which management expects to use these assets.

Deprecia�on on addi�ons (disposal) is provided on a pro-rata basis i.e. from (upto) the date on which asset is ready for use (disposed of).

Derecogni�on

A property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use and disposal. Losses arising from re�rement and gains or losses arising from disposal of a tangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss.

d) Other intangible assets

Acquired Intangible

Intangible assets that are acquired by the Group are measured ini�ally at cost. Cost of an item of Intangible asset comprises its purchase price, including import du�es and non-refundable purchase taxes, a�er deduc�ng trade


175


discounts and rebates, any directly a�ributable cost of bringing the item to its working condi�on for its intended use. A�er ini�al recogni�on, an intangible asset is carried at its cost less any accumulated amor�sa�on and any accumulated impairment loss.


Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in Statement of Profit and Loss as incurred.


On transi�on to Ind AS, the Group has elected to con�nue with the carrying value of its intangible assets recognised as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such intangible assets.

Amor�sa�on

Amor�sa�on is calculated to write off the cost of intangible assets over their es�mated useful lives using the straight-line method, and is included in deprecia�on and amor�sa�on expense in Statement of Profit and Loss.

The es�mated useful lives are as follows:

- Technical know-how 4 Years

- So�ware 6 Years

- Web Portal 6 Years

Amor�sa�on method, useful life and residual values are reviewed at the end of each financial year and adjusted if appropriate.

Derecogni�on

Intangible assets is derecognised on disposal or when no future economic benefits are expected from its use and disposal.

e) Inventories

Inventories are measured at the lower of cost and net realisable value. The methods of determining cost of various categories of inventories are as follows:

The cost of inventories includes expenditure incurred in acquiring the inventories, produc�on or conversion costs


Raw materials (including goods in transit)

Traded Goods

Stores and spares

Work-in-progress and finished goods (manufactured)

Weighted average method



Variable cost at weighted average including an appropriate share of variable and fixed produc�on overheads. Fixed produc�on overheads are included based on normal capacity of produc�on facili�es.

and other costs incurred in bringing them to their present loca�on and condi�on.

Net realisable value is the es�mated selling price in the ordinary course of business, less the es�mated costs necessary to make the sale.

The net realisable value of work-in-progress is determined with reference to the selling prices of related finished products.

Raw materials, components and other supplies held for use in the produc�on of finished products are not wri�en down below cost except in cases where material prices have declined and it is es�mated that the cost of the finished products will exceed their net realisable value.

176


The comparison of cost and net realisable value is made on an item-by-item basis.

f) Employee benefits


Short-term employee benefit obliga�ons are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., salaries, wages and bonus etc., if the Group has a present legal or construc�ve obliga�on to pay this amount as a result of past service provided by the employee, and the amount of obliga�on can be es�mated reliably.

Share-based payment transac�ons

The grant date fair value of equity se�led share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees uncondi�onally become en�tled to the awards. The amount recognised as expense is based on the es�mate of the number of awards for which the related service and non-market ves�ng condi�ons are expected to be met, such that the amount ul�mately recognised as an expense is based on the number of awards that do meet the related service and non- market ves�ng condi�ons at the ves�ng date.

The Group has elected to apply Ind AS 102 Share based payment to equity instruments that vested a�er the date of transi�on to Ind AS pursuant to the exemp�on under Ind AS 101.


-Defined contribu�on plans

A defined contribu�on plan is a post-employment benefit plan under which an en�ty pays specified contribu�ons to a separate en�ty and will have no legal or construc�ve obliga�on to pay further amounts. The Group makes specified monthly contribu�ons towards employee provident fund and employee state insurance scheme ('ESI') to Government administered scheme which is a defined contribu�on plan. The Group's contribu�on is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. Certain employees of the Group are also par�cipants in the superannua�on plan ("the Plan"), a defined contribu�on plan. The Group makes specified monthly contribu�ons to Life Insurance Corpora�on of India (LIC). Contribu�on made by the Group to the plan during the year is charged to Statement of Profit and Loss.

-Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribu�on plan. Gratuity is a defined benefit plan. The administra�on of the gratuity scheme has been entrusted to the Life Insurance Corpora�on of India ('LIC'). The Group's net obliga�on in respect of gratuity is calculated separately by es�ma�ng the amount of future benefit that employees have earned in the current and prior periods, discoun�ng that amount and deduc�ng the fair value of any plan assets.

The calcula�on of defined benefit obliga�on is performed annually by a qualified actuary using the projected unit credit method.

Re-measurements of the net defined benefit liability i.e. Gratuity, which comprise actuarial gains and losses are recognised in Other Comprehensive Income (OCI). The Group determines the net interest expense (income) on the net defined benefit liability for the period by applying the discount rate used to measure the defined benefit obliga�on at the beginning of the annual period to the then- net defined benefit liability, taking into account any changes in the net defined benefit liability during the period as a result of contribu�ons and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in the Statement of Profit and Loss.

When the benefits of a plan are changed or when a plan is curtailed, the resul�ng change in benefit that relates to past service ('past service cost' or 'past service gain') or the gain or loss on curtailment is recognised immediately in the Statement of Profit and Loss. The Group recognises gains and losses on the se�lement of a defined benefit plan when the se�lement occurs.

Other long term employee benefits


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Compensated absences

The Group's net obliga�on in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. Such obliga�on such as those related to compensate absences is measured on the basis of an annual independent actuarial valua�on using the projected unit cost credit method. Remeasurements gains or losses are recognised in profit or loss in the period in which they arise.

Termina�on benefits

Termina�on benefits are recognised as an expense when, as a result of past event, the Group has a present obliga�on that can be es�mated reliably, and it is probable that can be es�mated reliably, and it is probable that an ou�low of economic benefits will be required to se�le the obliga�on.

g) Provisions (other than for employee benefits)

A provision is recognised if, as a result of a past event, the Group has a present legal or construc�ve obliga�on that can be es�mated reliably, and it is probable that an ou�low of economic benefits will be required to se�le the obliga�on. Provisions are determined by discoun�ng the expected future cash flows (represen�ng the best es�mate of the expenditure required to se�le the present obliga�on at the balance sheet date) at a pre-tax rate that reflects current market assessments of the �me value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future losses are not provided for.

h) Con�ngent liabili�es and con�ngent assets

A con�ngent liability exists when there is a possible but not probable obliga�on, or a present obliga�on that may, but probably will not, require an ou�low of resources, or a present obliga�on whose amount cannot be es�mated reliably. Con�ngent liabili�es do not warrant provisions, but are disclosed unless the possibility of ou�low of resources is remote.

Con�ngent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the en�ty. Con�ngent assets are recognized when the realisa�on of income is virtually certain, then the related asset is not a con�ngent asset and its recogni�on is appropriate.

A con�ngent asset is disclosed where an inflow of economic benefits is probable.

i) Commitments

Commitments include the amount of purchase order (net of advances) issued to par�es for comple�on of assets. Provisions, con�ngent liabili�es, con�ngent assets and commitments are reviewed at each repor�ng date.

j) Revenue

Sale of goods

Revenue from the sale of goods in the course of ordinary ac�vi�es includes excise duty �ll 30 June 2017 (goods and service tax ('GST') with effect from 1 July 2017) and is measured at the fair value of the considera�on received or receivable, exclusive of taxes as applicable such as sales tax, value added taxes (VAT), service tax and GST, and is net of returns, trade discounts, quan�ty discounts and cash discounts. Revenue includes shipping and handling costs billed to the customer. This inter alia involves discoun�ng of the considera�on due to the present value if payment extends beyond normal credit terms.

Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the considera�on is probable, the associated costs and possible return of goods can be es�mated reliably, there is no con�nuing effec�ve control over, or managerial involvement with, the goods, and the amount of revenue can be measured reliably.

The �ming of transfers of risk and rewards varies depending on the individual terms of sale. For sales of watches, such transfer occurs when the product is handed over to the customer at the retail stores. Generally for such products, the buyer has no right of return.

Customer loyalty programmes

For customer loyalty programmes, the fair value of the considera�on received or receivable in respect of ini�al


178


sale is allocated between the award credits and the other components of the sale. The amount allocated to award credits is deferred and is recognised as revenue when the award credits are redeemed and the Group has fulfilled its obliga�ons to supply the discounted products under the terms of the programme or when it is no longer probable that the award credits will be redeemed.

Sale of services

Revenue from services rendered is recognised in profit or loss when the services are rendered and the related costs are incurred.

Export benefits

Export benefits under various schemes no�fied by the government are recognized on accrual basis when no significant uncertain�es as to the amount of considera�on that would be derived and as to its ul�mate collec�on exist.

k) Recogni�on of interest income or expense

Interest income or expense is recognised using the effec�ve interest method.

The 'effec�ve interest rate' is the rate that exactly discounts the es�mated future cash payments or receipts through the expected life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- the amor�sed cost of the financial liability.

In calcula�ng interest income and expense, the effec�ve interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amor�sed cost of the liability. However, for financial assets that have become credit-impaired subsequent to ini�al recogni�on, interest income is calculated by applying the effec�ve interest rate to the amor�sed cost of the financial asset. If the asset is no longer credit-impaired, then the calcula�on of interest income reverts to the gross basis.

l) Borrowing costs

Borrowing costs are interest and other costs (including exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred by the Group in connec�on with the borrowing of funds. Borrowing costs directly a�ributable to acquisi�on or construc�on of an asset which necessarily take a substan�al period of �me to get ready for their intended use are capitalized as a part of cost of the asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

m) Income taxes

Income tax comprises current and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that it relates to a business combina�on or an item recognised directly in equity or in other comprehensive income.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best es�mate of the tax amount expected to be paid or received a�er considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substan�vely enacted by the repor�ng date.

Current tax assets and current tax liabili�es are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and se�le the liability on a net basis or simultaneously.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of the assets and liabili�es for financial repor�ng purposes and the corresponding amounts used for taxa�on purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits.

Deferred tax assets are recognised to the extent that it is probable that future profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case of history of recent losses, the Group recognises a deferred tax asset only to the


179


extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realized. Deferred tax assets – unrecognised or recognised, are reviewed at each repor�ng date and are recognised / reduced to the extent that it is probable / no longer probable respec�vely that the related tax benefits will be realized.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is se�led, based on the laws that have been enacted or substan�vely enacted by the repor�ng date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the repor�ng date, to recover or se�le the carrying amount of its assets and liabili�es.

Deferred tax assets and deferred tax liabili�es are offset only if there is a legally enforceable right to offset current tax liabili�es and assets, and they relate to income taxes levied by the same tax authori�es.

Minimum alternate tax

Minimum alternate tax ('MAT') under the provisions of Income-tax Act, 1961 is recognized as current tax in statement of profit and loss. The credit available under the Act in respect of MAT paid is adjusted from deferred tax liability only when and to the extent there is convincing evidence that the Group will pay normal income tax during the period for which the MAT credit can be carried forward for set-off against the normal tax liability. MAT credit recognized adjusted from deferred tax liability is reviewed at each balance sheet date and wri�en down to the extent the aforesaid convincing evidence no longer exists.

n) Leases

At the incep�on of each lease, the lease arrangement is classified as either a finance lease or an opera�ng lease based on the substance of the lease arrangement.

Finance leases

Assets leased by the Group in its capacity as lessee where substan�ally all the risks and rewards of ownership vest in the Group are classified as finance leases. A finance lease is recognized as an asset and a liability at the commencement of the lease, at the lower of the fair value of the asset and the present value of the minimum lease payments. Minimum lease payments made under finance leases are appor�oned between the finance expense and the reduc�on of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Opera�ng leases

Leases in which a significant por�on of the risks and rewards of ownership are not transferred to the Group as lessee are classified as opera�ng leases. Payment made under opera�ng leases (net of any incen�ves received from the lessor) are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease unless the payment are structured to increase in line with expected general infla�on to compensate for the lessor's expected infla�onary cost increases.

o) Financial instruments

A Financial instrument is any contract that gives rise to a financial asset of one en�ty and a financial liability or equity instrument of another en�ty.

Financial assets

Ini�al recogni�on and measurement

All financial assets are recognised ini�ally at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transac�on costs that are a�ributable to the acquisi�on of the financial asset. Purchases or sales of financial assets that require delivery of assets within a �me frame established by regula�on or conven�on in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

l Debt instruments at amor�sed cost

l Debt instruments at fair value through other comprehensive income (FVOCI)


180


l Debt instruments, deriva�ves and equity instruments at fair value through profit or loss (FVPL)

l Equity instruments measured at fair value through other comprehensive income (FVOCI)

Debt instruments at amor�sed cost

A 'debt instrument' is measured at the amor�sed cost if the asset is held within a business model whose objec�ve is to hold assets for collec�ng contractual cash flows, and contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

A�er ini�al measurement, such financial assets are subsequently measured at amor�sed cost using the effec�ve interest rate (EIR) method. The effec�ve interest rate is the rate that exactly discounts es�mated future cash payments or receipts through the expected life of the financial instrument to the gross carrying amount of the financial asset or the amor�sed cost of the financial liability. Amor�sed cost is calculated by taking into account any discount or premium on acquisi�on and fees or costs that are an integral part of the EIR. The EIR amor�sa�on is included in other income in the Statement of Profit and Loss. The losses arising from impairment are recognised in the Statement of Profit and Loss.

Debt instrument at FVOCI

A 'debt instrument' is classified as at the FVOCI if the objec�ve of the business model is achieved both by collec�ng contractual cash flows and selling the financial assets, and the asset's contractual cash flows represent SPPI.

Debt instruments included within the FVOCI category are measured ini�ally as well as at each repor�ng date at fair value. Fair value movements are recognised in the other comprehensive income (OCI). On derecogni�on of the asset, cumula�ve gain or loss previously recognised in OCI is reclassified to the Statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Debt instrument at FVPL

FVPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categoriza�on as at amor�sed cost or as FVOCI, is classified as at FVPL. In addi�on, at ini�al recogni�on, the Group may irrevocably elect to designate a debt instrument, which otherwise meets amor�sed cost or FVOCI criteria, as at FVPL. However, such adop�on is allowed only if doing so reduces or eliminates a measurement or recogni�on inconsistency (referred to as 'accoun�ng mismatch').

Debt instruments included within the FVPL category are measured at fair value with all changes recognised in the Statement of Profit and Loss.

Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and con�ngent considera�on recognised by an acquirer in a business combina�on to which Ind AS 103 applies are classified as at FVPL. For all other equity instruments, the Group may make an irrevocable adop�on to present in other comprehensive income subsequent changes in the fair value. The Group makes such adop�on on an instrument-by-instrument basis. The classifica�on is made on ini�al recogni�on and is irrevocable.

If the Group decides to classify an equity instrument as at FVOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to the Statement of Profit and Loss, even on sale of investment. However, the Group may transfer the cumula�ve gain or loss to retained earnings.

Equity instruments included within the FVPL category are measured at fair value with all changes recognised in the Statement of Profit and Loss.

Impairment of financial assets

The Group recognises loss allowances for expected credit loss on financial assets measured at amor�sed cost. At each repor�ng date, the Group assesses whether financial assets carried at amor�sed cost are credit- impaired. A financial asset is 'credit-impaired' when one or more events that have detrimental impact on the es�mated future cash flows of the financial assets have occurred.

Evidence that the financial asset is credit-impaired includes the following observable data:


181


- significant financial difficulty of the borrower or issuer;

- the breach of contract such as a default or being past due for 90 days or more;

- the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;

- it is probable that the borrower will enter bankruptcy or other financial re-organisa�on; or

- the disappearance of ac�ve market for a security because of financial difficul�es.

The Group measures loss allowances at an amount equal to life�me expected credit losses, except for the following, which are measured as 12 month expected credit losses:

- Bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since ini�al recogni�on.

Loss allowances for trade receivables are always measured at an amount equal to life�me expected credit losses. Life�me expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

12-month expected credit losses are the por�on of expected credit losses that result from default events that are possible within 12 months a�er the repor�ng date (or a shorter period if the expected life of the instrument is less than 12 months). In all cases, the maximum period considered when es�ma�ng expected credit losses is the maximum contractual period over which the Group is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since ini�al recogni�on and when es�ma�ng expected credit losses, the Group considers reasonable and supportable informa�on that is relevant and available without undue cost or effort. This includes both quan�ta�ve and qualita�ve informa�on and analysis, based on the Group's historical experience and informed credit assessment and including forward looking informa�on.

Measurement of expected credit losses

Expected credit losses are a probability-weighted es�mate of credit losses. Credit losses are measured as the present value of all cash shor�alls (i.e. difference between the cash flow due to the Group in accordance with the contract and the cash flow that the Group expects to receive).

Presenta�on of allowance for expected credit losses in the balance sheet

Loss allowance for financial assets measured at the amor�sed cost is deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is wri�en off (either par�ally or in full) to the extent that there is no realis�c prospect of recovery. This is generally the case when the Group determines that the debtors do not have assets or sources of income that could generate sufficient cash flows to repay the amount subject to the write-off. However, financial assets that are wri�en off could s�ll be subject to enforcement ac�vi�es in order to comply with the Group's procedure for recovery of amounts due.

Derecogni�on of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group's balance sheet) when:

- The rights to receive cash flows from the asset have expired, or

- The Group has transferred its rights to receive cash flows from the asset or has assumed an obliga�on to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the Group has transferred substan�ally all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substan�ally all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substan�ally all of the risks and rewards of the asset, nor transferred control of the asset, the Group con�nues to recognise the transferred asset to the extent of the Group's con�nuing


182


involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obliga�ons that the Group has retained.


Financial liabili�es are classified as measured at amor�sed cost or FVPL. A financial liability is classified as at FVPL if it is classified as held-for-trading, or it is a deriva�ve or it is designated as such on ini�al recogni�on. Financial liabili�es at FVPL are measured at fair value and net gains and losses, including any interest expense, are recognised in Statement of Profit and Loss. Other financial liabili�es are subsequently measured at amor�sed cost using the effec�ve interest method.

Interest expense and foreign exchange gains and losses are recognised in Statement of Profit and Loss. Any gain or loss on derecogni�on is also recognised in Statement of Profit and Loss.

Derecogni�on of financial liabili�es

A financial liability is derecognised when the obliga�on under the liability is discharged or cancelled or expires. When an exis�ng financial liability is replaced by another from the same lender on substan�ally different terms, or the terms of an exis�ng liability are substan�ally modified, such an exchange or modifica�on is treated as the derecogni�on of the original liability and the recogni�on of a new liability. The difference in the respec�ve carrying amounts is recognised in the Statement of Profit and Loss.

Deriva�ve financial instruments

The Group uses various types of deriva�ve financial instruments to hedge its currency and interest risk etc. Such deriva�ve financial instruments are ini�ally recognised at fair value on the date on which a deriva�ve contract is entered into and are subsequently re-measured at fair value. Deriva�ves are carried as financial assets when the fair value is posi�ve and as financial liabili�es when the fair value is nega�ve.

Offse�ng

Financial assets and financial liabili�es are offset and the net amount presented in the Balance Sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to se�le them on a net basis or to realise the asset and se�le the liability simultaneously.

o) Impairment of non-financial assets

The Group's non-financial assets other than inventories and deferred tax assets, are reviewed at each repor�ng date to determine if there is indica�on of any impairment. If any such indica�on exists, then the asset's recoverable amount is es�mated. For impairment tes�ng, assets that do not generate independent cash flows are grouped together into cash genera�ng units (CGUs). Each CGU represents the smallest group of assets that generate cash inflows that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of as CGU (or an individual asset) is the higher of its value in use and fair value less cost to sell. Value in use is based on the es�mated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current assessments of the �me value of money and the risks specific to the CGU (or the asset).

The Group's corporate assets (e.g., central office building for providing support to various CGUs) do not generate independent cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the corporate asset belongs.

An impairment loss is recognised whenever the carrying amount of an asset or its cash genera�ng unit exceeds its recoverable amount. Impairment losses are recognised in Statement of Profit and Loss. An impairment loss is reversed if there has been a change in the es�mates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined net of deprecia�on or amor�sa�on, if no impairment loss had been recognised.

p) Opera�ng segments

An opera�ng segment is a component of the Group that engages in business ac�vi�es from which it may earn revenues and incur expenses, including revenues and expenses that relate to transac�ons with any of the Group’s other components, and for which discrete financial informa�on is available. All opera�ng segments’ opera�ng results are reviewed regularly by the Company’s Chief Opera�ng Decision Maker (CODM) to make decisions


183


about resources to be allocated to the segments and assess their performance.

q) Cash and cash equivalents

For the purpose of presenta�on in the statement of cash flows, cash and cash equivalents include cash in hand, demand deposits held with banks, other short-term highly liquid investments with original maturi�es of three months or less that are readily conver�ble to known amounts of cash and which are subject to an insignificant risk of changes in value.

r) Cash flow statement

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transac�ons of a non-cash nature, any deferrals or accruals of past or future opera�ng cash receipts or payments and item of income or expenses associated with inves�ng or financing cash flows. The cash flows from opera�ng, inves�ng and financing ac�vi�es of the Group are segregated.

s) Earnings per share

Basic earnings/ (loss) per share are calculated by dividing the net profit/ (loss) for the year a�ributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue and share split. For the purpose of calcula�ng diluted earnings/ (loss) per share, the net profit or loss for the period a�ributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilu�ve poten�al equity shares. The dilu�ve poten�al equity shares are deemed converted as of the beginning of the period, unless they have been issued at a later date

t) Recent Accoun�ng pronouncements

Applicable standards issued but not yet effec�ve

Ind AS 115, Revenue from contracts with customers

Ind AS 115 establishes a single comprehensive model for en��es to use in accoun�ng for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recogni�on standard Ind AS 18 Revenue, Ind AS 11 Construc�on Contracts when it becomes effec�ve.

The core principle of Ind AS 115 is that an en�ty should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the considera�on to which the en�ty expects to be en�tled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recogni�on:

- Step 1: Iden�fy the contract(s) with a customer

- Step 2: Iden�fy the performance obliga�on in contract

- Step 3: Determine the transac�on price

- Step 4: Allocate the transac�on price to the performance obliga�ons in the contract

- Step 5: Recognise revenue when (or as) the en�ty sa�sfies a performance obliga�on

Under Ind AS 115, an en�ty recognises revenue when (or as) a performance obliga�on is sa�sfied, i.e. when 'control' of the goods or services underlying the par�cular performance obliga�on is transferred to the customer.

The Group has completed its evalua�on of the possible impact of Ind AS 115 and does not expect the impact of the adop�on of the new standard to be material.

Appendix B, Ind AS 21 – The effect of changes in Foreign Exchange rates

The amendment clarifies on the accoun�ng of transac�ons that include the receipt or payment of advance considera�on in a foreign currency. The appendix explains that the date of the transac�on, for the purpose of determining the exchange rate, is the date of ini�al recogni�on of the non-monetary prepayment asset or deferred income liability. If there are mul�ple payments or receipts in advance, a date of transac�on is established for each payment or receipt. The Group has completed its evalua�on and the possible impact of this amendment and does not expect the impact and adop�on of this amendment to be material.


184


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Gross carrying amount (refer note d)

Technical

know-howSo�wares Web portal Total

Deemed cost Balance as at 1 April 2016 4.16 135.04 13.03 152.23

Addi�ons - acquired - 10.62 - 10.62

Disposals - - - -

Balance as at 31 March 2017 4.16 145.66 13.03 162.85

Balance as at 1 April 2017 4.16 145.66 13.03 162.85

Addi�ons - acquired - 15.05 - 15.05

Disposals - 0.83 - 0.83

Balance as at 31 March 2018 4.16 159.88 13.03 177.07

Accumulated amor�sa�on (refer note d)Balance as at 1 April 2016 - - - -


42.48

9.33

55.53

Disposals -

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42.48

9.33

55.53


42.48

9.33

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37.98

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38.43

Disposals -

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80.04

9.33

93.54

Carrying amounts (net)

At 1 April 2016 4.16

135.04

13.03

152.23

At 31 March 2017At 31 March 2018

0.44(0.47)

103.18

79.84

3.703.70

107.32

83.53


Notes:d. Refer note 36A for a reconcilia�on of deemed cost as considered by the Company pursuant to transi�on provision under Ind AS 101.

186

Notes to the Consolidated Ind AS Financial Statements for the year ended 31 March 2018(All amounts are in Indian Rupees Lakhs, except for share data)

RevenueOther income

6.00 6.00

Deprecia�on and amor�sa�on(0.35) (0.50)

Finance costs- -

Employee benefit expense(2.71) (0.60)

Other expenses(1.98) (1.86)

Profit 0.96 3.04

Other comprehensive income- -

Total comprehensive income0.96 3.04

Group's share of profit (30%)0.29 0.91

Group's share of other comprehensive income (30%)- -

Group's share of total comprehensive income0.29 0.91 0.29 0.91

Year ended

31 March 2018

Year ended

31 March 2017

5 Equity accounted investees

See accoun�ng policies in Notes 2(b)(v).

Note As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

Interest in associates (a) 28.35

28.06

27.14

Interest in joint venture (b) -

-

25.44

28.35

28.06

52.58

(a) The following table summarises the financial informa�on and the carrying amount of the Group’s interest in associate:

Name of associate As at

31 March 2018

As at

31 March 2017

As at

1 April2016

(i) Kamla Tesio Dials Limited India 30% 30% 30%

Current assets [(including cash and cash equivalents of Rs. 25.85 (31 March 2017: Rs. 24.95, 1 April 2016: Rs. 21.64)]

27.94 27.05 23.73

Non-current assets 66.94 67.26 67.76

0.38 0.78 1.02

Non-current liabili�es - - -

Net assets 94.50 93.53 90.47

Group’s share of net assets (30%) 28.35 28.06 27.14

Carrying amount of the interest in associate 28.35 28.06 27.14

Percentage ownership interest

Current liabili�es [including financial liabili�es (other than trade payables and other financial liabili�es and provisions) of Rs. 0.38 (31 March 2017: Rs. 0.78, 1 April 2016: Rs. 1.02)]

Principal place

of businessPrincipal ac�vity

Manufacture of dials and accessories


187


Name of associate As at

31 March 2018

As at

31 March 2017

As at

1 April2016

(ii) Cadrafin Sari * Switzerland 22% - -

Current assets [(including cash and cash equivalents of Rs. 21.20 (31 March 2017: Rs. Nil, 1 April 2016: Rs. Nil)]

21.20 - -

Non-current assets 27.18 - -

19.65 - -

* Based on unaudited financial informa�on**Recognised loss upto the amount of cost of investment during the year

Percentage ownership interest

Current liabili�es [including financial liabili�es (other than trade payables and other financial liabili�es and provisions) of Rs. 19.65 (31 March 2017 : Rs. Nil, 1 April 2016 : Rs. Nil)]

Principal place

of businessPrincipal ac�vity

Manufacture of watchcomponents

Non-current liabili�es 38.02 - -

Net assets (9.29) - -

Group’s share of net assets (22%) (1.86) - -

Carrying amount of the Company's interest in associate** - - -

Revenue 9.08 - Other income - - Deprecia�on and amor�sa�on - - Finance costs (0.39) - Other expenses (30.28) - Profit (21.59) Other comprehensive income - - Total comprehensive income (21.59) - Group's share of profit/(loss) (22%)** (2.90) - Group's share of other comprehensive income (22%) - - Group's share of total comprehensive income (2.90) -

Year ended

31 March 2018

Year ended

31 March 2017

-

(b) The following table summarizes the financial informa�on and the carrying amount of the Group’s interest in joint venture:

Name of joint venture As at31 March

2018

Satva Jewellery and Design Limited - - 50%

Current assets [(including cash and cash equivalents of Rs. Nil (31 March 2017: Rs. Nil, 1 April 2016: Rs. 0.21)]

- - 17.22

Non-current assets - - 116.14

(82.48)

Non-current liabili�es - - -

Net assets - - 50.88

Group’s share of net assets (50%) - - 25.44

Carrying amount of the Company's interest in joint venture - - 25.44

India

Principal place

of business

Current liabili�es [including financial liabili�es (other than trade payables and other financial liabili�es and provisions) of Rs. Nil ( 31 March 2017 : Rs. Nil, 1 April 2016 : Rs. 24.02)]

Diamond and stone fixa�on on

watch accessories and jewellery items

Percentage ownership interestPrincipal ac�vity

As at31 March

2017

As at1 April

2016


188

- -


RevenueOther incomeDeprecia�on and amor�sa�onFinance costsOther expensesProfit Other comprehensive incomeTotal comprehensive incomeGroup's share of profit (50%)Group's share of other comprehensive income (50%)Group's share of total comprehensive income

*Satva Jewellery and Design Limited ('Satva') became wholly owned subsidiary of KDDL Limited with effect from 23 December 2016.

6 Investments31 March 2018

Non-current investmentsUnquoted investments (fully paid up)

Other Companies (Fair value through Statement of Profit and Loss):

Aggregate amount of unquoted investments

7 Loans(Unsecured, considered good, unless otherwise stated) As at

31 March 2018

As at1 April

2016 Security deposit

- to related par�es (refer to note 42) 2.00 2.00 2.00

- to others 1,007.94 810.06 857.27Loan to employees

- to related par�es (refer to note 42) 30.07 33.46 35.70

- to others 20.61

11.32 62.03

1,060.62

856.84

957.00


Deriva�ves financial instruments (Fair value through Statement of Profit and Loss)Interest accrued but not due on deposits

Recoverable from related par�es

9 Income tax asset (net)31 March 2018

Advance income-tax (net of provision of Rs. 943.54 ( 31 March 2017: Rs. 943.54, 1 April 2016: Rs. 1,400.05)

- Karolview Developers Private Limited 500,000 (31 March 2017 : 500,000, 1 April 2016 : 500,000) equity shares of Rs. 10 each fully paid up

- Shivalik Solid Waste Management Limited17,500 (31 March 2017 : 17,500, 1 April 2016 : 17,500) equity shares of Rs. 10 each fully paid up

# These deposits include restricted bank deposits amoun�ng to Rs. 215.01 (31 March 2017: Rs. 79.10, 1 April 2016: Rs. 95.11 ) on account of deposits pledged as security for bank guarantees.

Non-Current

Deposit accounts with original maturity more than 12 months #

As at

38.13

10.53

48.66

48.66

-

390.21

6.17

47.92

444.30

As at

622.97

622.97

31 March 2017

31 March 2017

31 March 2018

Current

Year ended

38.13

10.53

48.66

48.66

353.56

40.68

403.01

709.59

709.59

-----------

Year ended

31 March 2017

(12.08)(13.24)

32.96 2.38

(1.08)8.94

-8.944.47

-4.47

As at As at

1 April 2016

45.90

5.38

51.28

51.28

-

8.77

As at31 March

2017

As at31 March

2018

As at1 April

2016

As at31 March

2017

As at

1 April 2016

604.65

604.65

As at

-

408.28

-

63.18

471.46


189


Non-Current Current

224.32 85.86 168.17

- - -

- - -

- - -

224.32 85.86 168.17

As at31 March

2018

As at1 April

2016

As at31 March

2017

-2.80

-

- -

9.58

38.50

-

41.30

31.70

31.70

-

22.29

64.61

96.48

As at31 March

2018

As at1 April

2016

As at31 March

2017

10. Deferred tax asset / (liabili�es (net)

Deferred tax assets on

- Tax losses carried forward - 201.15 46.39

- Expected credit allowance 1.98 3.04 3.14

- Provision for warran�es 7.61 5.58 3.80 - Provision for employee benefits 122.23 116.72 147.62

- Provision for bonus 43.62 49.87 52.09

- Other provisions 81.52 24.83 31.40

- Minimum alternate tax credit en�tlement 1.89 1.89 1.89

- Others 53.77 43.79 27.94

Deferred tax assets (A) 312.62 446.87 314.27

Deferred tax liability on

- Excess deprecia�on as per Income tax Act, 1961

over deprecia�on as per books (net) 195.42 375.46 432.66

Deferred tax liability (B) 195.42 375.46 432.66

Net deferred tax asset / (liabili�es) (A - B) 117.20 71.41 (118.39)

Aggregate of net deferred tax assets jurisdic�ons 495.52 527.85 284.92

Aggregate of net deferred tax liabili�es jurisdic�ons (378.32) (456.44) (403.31)

Net deferred tax asset / (liabili�es) 117.20 71.41 (118.39)

As at Recognised Recognised Recognised 1 April 2016 in profit or in other in profit or loss during the comprehensive loss period Income during the period

2016-2017

- Excess deprecia�on as per Income tax

Act, 1961 over deprecia�on as per books (432.66) 57.20 - (375.46)

- Tax losses carried forward 46.39 154.76 - 201.15

- Expected credit allowance 3.14 (0.10) - 3.04

- Provision for warran�es 3.80 1.78 - 5.58

- Provision for employee benefits 147.62 (39.13) 8.23 116.72

- Provision for bonus 52.09 (2.22) - 49.87

- Other provisions 31.40 (6.57) - 24.83

- Minimum alternate tax credit en�tlement 1.89 - - 1.89

- Others 27.94 15.85 - 43.79

(118.39) 181.57 8.23 71.41

As at31 March

2018

As at31 March

2017

As at1 April

2016


190


As at Recognised Recognised As at

1 April in profit or in other 31 March

2017 loss during the comprehensive 2018

2017-2018 year Income

- Excess deprecia�on as per Income

tax Act, 1961 over deprecia�on as per books (375.46) 180.04 - (195.42)

-Tax losses carried forward 201.15 (201.15) - -

-Expected credit allowance 3.04 (1.06) - 1.98

-Provision for warran�es 5.58 2.03 - 7.61

-Provision for employee benefits 116.72 (4.20) 9.71 122.23

-Provision for bonus 49.87 (6.25) - 43.62

-Other provisions 24.83 56.69 - 81.52

-Minimum alternate tax credit en�tlement 1.89 - - 1.89

-Others 43.79 9.98 - 53.77

71.41 36.08 9.71 117.20

Deferred tax assets have not been recognised in respect of certain subsidiries, because it is not probable that future taxable profit will be available against which the Group can use the benefits there from:

As at As at As at


Tax losses (will expire by 2020-26 (31 March 2017 : 2020-25, 608.57 661.47 1,162.55

1 April 2016 : 2020-24)

Unrecognised tax effect 157.31 177.98 284.57

Deduc�ble temporary differences 36.42 36.29 32.57

unrecognised tax effect 10.13 11.21 10.06

11 Other non-current assets As at As at As at

(Unsecured, considered good, unless otherwise stated) 31 March 2018 31 March 2017 1 April 2016

Capital advances

- to others 305.43 222.19 29.90

Advances other than capital advances

- Advances to employees 51.13 22.42 12.24

- Prepaid expenses 121.31 134.78 214.07

- Recoverable from / balance with government authori�es 48.56 99.20 77.05

- Claim receivable (refer note 40(iii)) 170.00 170.00 170.00

- Insurance claim recoverable - 0.27 68.78

696.43 648.86 572.04

As at As at As at

12. Inventories 31 March 31 March 1 April

(at lower of cost and net realisable value) 2018 2017 2016

Raw material* 1,410.04 1,135.36 1,156.82

Work-in-progress 977.64 667.64 600.83

Finished goods 99.47 83.33 93.44

Stock in trade* 17,387.87 16,898.58 16,520.94

Stores and spares 240.40 235.35 266.95

20,115.42 19,020.26 18,638.98


191


13. Trade receivables

(Unsecured, considered good, unless otherwise stated)

Trade receivables

- Related par�es - -

- Others

- considered good 3,264.21 2,613.63 2,363.63

- considered doub�ul 6.80 8.79 9.09

Less: expected credit loss allowance (6.80) (8.79) (9.09)

3,264.21 2,613.63 2,363.63

14. Cash and cash equivalents

Balances with banks

- in current accounts 516.01 946.88 243.52

Remi�ances-in-transit 108.14 - -

Cheques, dra�s on hand 166.39 43.77 26.31

Cash on hand 103.39 103.21 245.86

Others

- credit cards receivable 233.67 62.49 102.08

1,127.60 1,156.35 617.77

15. Other bank balances

Deposit accounts with original maturity more than 3

months and upto 12 months from the repor�ng date (a) 649.02 847.63 425.15

Balance in unclaimed dividend accounts 23.94 19.69 25.21

672.96 867.32 450.36

Notes:

(a) These deposits include restricted bank deposits amoun�ng to Rs. 622.23 (31 March 2017: Rs. 838.37, 1 April 2016: Rs. 407.46) on account of deposits pledged as security for deposits from shareholders, bank guarantee and margin money.

16. Other current assets

(Unsecured, considered good, unless otherwise stated)

Recoverable from / balance with government authori�es 2,569.94 304.79 344.60

Advances for supply of goods and services 435.77 169.43 160.50

Advances to employees 126.95 69.22 105.18

Other advances 8.37 - 21.76

Prepaid expenses 149.84 185.63 205.10

3,290.87 729.07 837.14

As at31 March

2018

As at31 March

2017

As at1 April

2016


Note

192


*Include goods-in-transit - Raw material - Stock in trade

5.38386.66

12.94119.51

16.0757.20

(ii) Rights, preferences and restric�ons a�ached to shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company’s residual assets on winding up. The equity shares are en�tled to receive dividend as declared from �me to �me. The vo�ng rights of an equity shareholder on a poll (not on show of hands) are in propor�on to its share of the paid-up equity capital of the Company. Vo�ng rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid. Failure to pay any amount called up on shares may lead to forfeiture of the shares. On winding up of the Company, the holders of equity shares will be en�tled to receive the residual assets of the Company, remaining a�er distribu�on of all preferen�al amounts in propor�on to the number of equity shares held.

(iii) Reconcilia�on of the shares outstanding at beginning and at the end of the year


17 Equity Share capital

(i) Details of share capitalNumber of shares Amount Number of shares Amount Number of shares Amount

Authorised

Equity shares of Rs. 10 each. 12,480,000 1,248.00 12,480,000 1,248.00 12,480,000 1,248.00

12,480,000

1,248.00

12,480,000

1,248.00

12,480,000

1,248.00

Issued

Equity shares of Rs. 10 each 11,127,072 1,112.71 11,013,866 1,101.39 10,259,150 1,025.92

11,127,072

1,112.71

11,013,866

1,101.39

10,259,150

1,025.92

Subscribed and paid up capital

Equity shares of Rs. 10 each fully paid up 10,952,792

1,095.28 10,839,586 1,083.96 10,084,870 1,008.49

Forfeited equity shares of Rs.10 each 174,280

8.71 174,280 8.71 174,280 8.71

11,127,072

1,103.99

11,013,866

1,092.67

10,259,150

1,017.20


Par�culars As at 31 March 2018 As at 31 March 2017 Number of shares Amount Number of shares Amount Number of shares Amount

Balance at the beginning of the year 10,839,586

1,083.96

10,084,870

1,008.49

9,076,470

907.65

Add: Shares issued during the year 113,206

11.32

754,716

75.47

1,008,400

100.84

Balance at the end of the year 10,952,792

1,095.28

10,839,586

1,083.96 10,084,870 1,008.49

Details of Equity shares held by shareholders holding more than 5% of the aggregate equity shares in the Company:


Number of shares % of equity

shares held

Number of shares % of equity

shares held

Number of shares % of equity shares held

R. K. Saboo 2,058,460

19% 2,058,460

19% 2,058,460

20%

Yashovardhan Saboo 1,547,265

14% 1,509,530

14% 1,509,530 15%

Saif India V FII Holdings Limited 1,008,400

9% 1,008,400

9% 1,008,400 10%

Saif Partners India V Limited 754,716

7% 754,716

7% - -

As at 1 April 2016

As at 1 April 2016

193



(v) Bonus shares, shares buyback and issue of shares for considera�on other than cash (during five years immediately preceding 31 March 2018)

During the five years immediately preceding 31 March 2018, neither any bonus shares have been issued nor any shares have been bought back. Further, no shares have been issued for considera�on other than cash except during the year ended 31 March 2015, 39,750 equity shares of Rs. 10 each had been issued under employee stock op�on plans for which only exercise price had been received in cash.

(vi) Employee stock op�on plan

Terms a�ached to stock op�ons granted to employees of the Company are described in note 41D regarding share based payments.

(vii) Shares reserved for issue under op�ons and other commitments

As at 31 March 2018 As at March 2017 As at 1 April 2016

Number of shares Amount Number of shares Amount Number of shares Amount

Under KDDL Employee Stock Op�on 21,000 2.10 21,000 2.10 24,750 2.48 Plan - 2011: 21,000 equity shares of Rs.10 each, at an exercise price of Rs.120 per share ( Refer note 41D)

18 Other Equity

(also refer to Statement of Changes in Equity)

(i) Capital reserve

Accumulated capital surplus not available for distribu�on of dividend and expected to remain invested permanently.(ii) Securi�es premium

Securi�es premium represents the excess considera�on received by the Company over the face value of the shares issued to shareholders. This will be u�lised in accordance with the applicable provisions of the Companies Act, 2013.

(iii) General reserve

The general reserve is used from �me to �me to transfer profits from retained earnings for appropria�on purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to the statement of profit and loss.

(iv) Employee stock op�ons outstanding reserve

The fair value of the equity se�led share based payment transac�ons with employees is recognised in Statement of Profit and Loss with corresponding credit to share based payment reserve.

(v)Retained earnings

Retained earnings are the profits that the Company has earned �ll date, less any transfers to general reserve, dividends or other distribu�ons paid to shareholders.

(vi)Other comprehensive income (net of tax)

- Exchange differences arising on transla�on of the foreign opera�ons are recognised in other comprehensive income as described in accoun�ng policy and accumulated in a separate reserve within equity. The cumula�ve amount is reclassified to profit or loss when the Group and its associates dispose or par�ally dispose off its interest in a foreign opera�on through sale, liquida�on, repayment of share capital or abandonment of all, or part of, that en�ty.

(vii) Money Received against Shares Warrants

A share warrant is a financial instrument which gives holder the right to acquire equity shares. Money received against shares warrants comprise of share warrants issued by the Company against which shares are yet to be allo�ed.

194



As at31 March

2018

As at31 March

2017

As at1 April

2016Note

19 Borrowings

(i) Non-current borrowingsTerm-loans

From banks (secured) (a) 643.71 751.18 1,614.30

From others (secured) (b) 3,272.30 1,766.15 1,042.75

3,916.01 2,517.33 2,657.05

DepositsDeposits from shareholders

From related par�es (unsecured) (refer note 42) (c) 200.52 48.09 29.00

From others (unsecured) (c) 1,913.21 1,771.37 1,431.78

2,113.73 1,819.46 1,460.78

Inter corporate depositsFrom related par�es (unsecured) (refer note 42) (d) 667.00 300.00 300.00

From others (unsecured) (d) 300.00

300.00 500.00

967.00 600.00 800.00

Other loansFrom related par�es (unsecured) (refer note 42) (e) 376.76 135.81 70.00

From others (unsecured) (e) 71.27 343.97 -

448.03 479.78 70.00

Total non-current borrowings (including current maturi�es) 7,444.77 5,416.57 4,987.83

Less : Current maturi�es of non-current borrowings (refer to note 20) 2,847.30 1,789.36 1,693.15

4,597.47 3,627.21 3,294.68

Notes:

(a) '- Corporate loan from IDBI Bank amoun�ng to Rs. 81.99 (31 March 2017: Rs. 194.35, 1 April 2016: Rs 248.67) carrying interest rate of 3.00% over the bank base rate are secured by way of first pari passu charge on all the plant and machinery and furniture and fixtures of Derabassi unit (KDER), tool room division at Bengaluru (EIGEN) and hands division at Bengaluru (KHAN-1) and second charge on all the current assets (save and except the book debts) subject to the first charge in favour of the Company's bankers for securing the working capital limits. Term loans from IDBI Bank Limited amoun�ng to Rs. Nil (31 March 2017: Rs. 106.80, 1 April 2016: Rs. 118.90) carried interest rate of 2.50% over the bank base rate. The term loan is further secured by way of first pari passu mortgage charge on freehold land and building of KDER. The term loans are also personally guaranteed by the Chairman and Managing Director of the Company. The

195

During the previous year ended 31 March 2017, the Company had issued 377,356 share warrants at Rs. 265 per share warrant (including securi�es premium of Rs 255 per share warrant) on a preferen�al allotment basis to certain promoters and promoter en��es ('warrant holders') and had also received 25% applica�on money amoun�ng to Rs 66.25 per share warrant. The warrants are to be converted into equivalent number of equity shares on payment of balance 75% amount at any �me on or before the end of eighteen months from the date of allotment failing which these would stand forfeited. In the events the warrants are not converted into equity shares within the said period, the Company is eligible to forfeit the amounts received towards the warrants. During the year ended 31 March 2018, the Company has allo�ed 113,206 equity shares on conversion of equivalent number of share warrants to certain warrant holders on realiza�on of balance 75% towards these warrants.


Corporate loan is repayable in 2 equal quarterly instalments of Rs 28.12 each commencing from 31 May 2018 . The last instalment of Rs. 26.71 would be due on 30 November 2018.

- Vehicle loans from banks amoun�ng to Rs. 67.62 (31 March 2017: Rs. 29.72, 1 April 2016: Rs. 53.90) carrying interest rate in the range of 9.51% per annum to 11.00% per annum are secured against hypotheca�on of specific vehicle purchased out of the proceeds of those loans. The loans are to be repaid as per the respec�ve repayment schedule in equal monthly installments.

- Term loans from Bank of India amoun�ng to Rs. Nil (31 March 2017: Rs. 186.29, 1 April 2016: Rs. 552.32) carried interest rate of 2.95% over the bank MCLR are secured by way of first pari passu charge on all the plant and machinery and furniture and fixtures of the Company excluding the fixed assets installed at packaging division at Parwanoo (KPAC), hands division at Bengaluru (KHAN-2), and the plant and machinery and furniture and fixtures of dials division at Parwanoo (TTPA) acquired before 31 March 2005 and second charge on all the current assets (save and except the book debts) subject to the first charge in favour of the Company's bankers for securing the working capital limits. The term loan is further secured by way of first pari passu mortgage charge on freehold land and building of dials division at Derabassi (KDER). The term loans are also personally guaranteed by the Chairman Emeritus and Chairman and Managing Director of the Company.

- Term loan from Corpora�on Bank amoun�ng to Rs. Nil (31 March 2017: Rs. Nil, 1 April 2016: Rs. 230.89) carried interest rate of 5.50% over the bank base rate, was secured by way of first exclusive charge on all the plant and machinery and furniture and fixtures of KHAN-2 and second charge on all the current assets (save and except the book debts) subject to the first charge in favour of the Company's bankers for securing the working capital limits. The loan is further secured by exclusive mortgage charge on freehold land and building of KHAN-1, situated at Bengaluru.

- Term loan from Bank of India taken by subsidiary, Pylania SA amoun�ng to Rs. 343.04 (31 March 2017: Rs. 178.82, 1 April 2016: Rs. 183.05 ) is carrying interest rate of 12 months Euribor plus 3.45%. The loan is secured against bank guarantee given by the parent Company. The term loan is to be repaid in a bullet repayment a�er the bank guarantee is withdrawn by the Parent Company.

-Bank mortgage taken by subsidiary, Pylania SA amoun�ng to Rs Nil (31 March 2017: Rs 52.24, 1April 2016: Rs 89.55) carrying interest rate of 5.00% is secured against freehold land and building situated in Pylania.

-Term loans from The Jammu and Kashmir Bank Limited taken by the subsidiary, Ethos Limited amoun�ng to Rs. Nil (31 March 2017: Nil, 1 April 2016: Rs. 128.17), carrying interest rate of 12.25% p.a. was secured by first charge on en�re fixed assets, both present and future, of the subsidiary. These limits are also secured by first charge on fixed assets of KPAC unit at Chandigarh of Parent Company. This is further secured by the first and exclusive charge over land and building, plant and machinery and office equipment of the Parwanoo unit of Parent Company, excluding the assets purchased a�er 1 April 2005. These loans are also guaranteed by the Parent Company and the director of the subsidiary.

-Vehicle loans taken by the subsidiary, Ethos Limited amoun�ng to Rs. 151.06 ( 31 March 2017 : Rs. 2.96, 1 April 2016 : Rs. 8.85) are secured against hypotheca�on of the specified vehicle purchased from proceeds of the said loan. The rate of interest on vehicle loans varies from 8.23% to 11.76% per annum ( 31 March 2017 : 10.01 to 11.76%; 1 April 2016 : 11.05 to 12.70%). The above loans are repayable in monthly installments within a period of next two to five years as per repayment schedule.

(b) - Term loan from Intec Capital limited amoun�ng to Rs. 42.46 (31 March 2017: Rs. 64.34, 1 April 2016: Rs. 83.53) carrying fixed interest rate of 11.75% is secured by way of hypotheca�on of the specific asset purchased out of proceeds of the loan. The loan is also personally guaranteed of Chairman Emeritus and Chairman and Managing Director of the Company. The loan is to be repaid in 32 monthly installments as per the repayment schedule in equal monthly installments commencing from 1 April 2016. The last instalment would be repaid on 1 November 2019.

- Term loan from Tata Capital Financial Services Limited amoun�ng to Rs. 369.63 (31 March 2017: Rs. 504.87, 1 April 2016: Rs. 536.50) carrying interest rate equal to LTLR less 7% (presently 10.50%) is secured by way of first pari passu charge over the project leasehold immovable property and over movable fixed assets of Eigen III, situated at plot no. 55-A (Aerospace sector) Hitech, Devanahalli, Banglore. The loan is also personally guaranteed by Chairman and Managing Director of the Company. The loan is to be repaid in 33 monthly intallments of Rs. 11.30 as per the repayment schedule


196


in equal monthly installment commencing from 25 April 2018. The last instalment would be repaid on 25 November 2020.

- Term loan from Tata Capital Financial Services Limited amoun�ng to Rs. 337.50 (31 March 2017: Rs. 427.51, 1 April 2016: Rs. Nil) carrying interest rate equal to LTLR less 7.25% (presently 10.50%) is secured by way of exclusive charge by way of mortgage over the freehold land & building of the borrower situated at Plot No. 296 & 297 (South western Por�on) 5th Main, 4th Phase, Peenya Industrial Area, Peenya, Bangalore and exclusive charge by way of hypotheca�on over the plant & machineries & other movable assets of KHAN II, The loan is also personally guaranteed by Chairman and Managing Director of the Company. The loan is to be repaid in 15 quarterly installments of Rs. 22.50 as per the repayment schedule in equal quarterly installments commencing from 8 April 2018. The last instalment would be repaid on 8 October 2021.

- Term loan from Bajaj Finance Limited amoun�ng to Rs. 2161.77 (31 March 2017: Rs. 395.79, 1 April 2016: Rs. Nil) carrying interest rate of 9.60% is secured by pari passu charge by way of hypotheca�on of equipment procured out of the term loan, mortgage of Leasehold Land & Building at Eigen III. The loan is also personally guaranteed by Chairman and Managing Director of the Company. The loan of Rs. 1200 is to be repaid in 55 instalments of Rs.21.13 lakh and last instalment would be paid on 5th October, 2022. The loan of Rs. 1000 is to be repaid in 48 monthly installments of Rs. 20.83 as per the repayment schedule in equal monthly installment commencing from 05 January 2019. The last instalment would be repaid on 5 December 2022.

- Term loan from Indiabulls Housing Finance Limited taken by the subsidiary, Ethos Limited amoun�ng to Rs. 334.31 (31 March 2017: Rs. 373.65, 1 April 2016: Rs. 422.71 ), carrying interest rate from 11% to 12.75% p.a. are secured by exclusive mortgage and charge on personal property of the director and rela�ves of the director of the subsidiary. These limits are also guaranteed by the Company, director of the subsidiary and rela�ves of the director. The original Loan of Rs 450 taken in March 2014 will be repaid in 120 monthly instalments and Rs 50 taken in March 2014 will be repaid in 36 monthly instalments along with interest as per repayment schedule.

- Vehicle loans from Daimler Financial Services taken by the Company amoun�ng to Rs. 26.63 (31 March 2017: Rs. Nil, 1 April 2016: Rs. Nil) carrying interest rate in the range of 9.51% per annum to 11.0% per annum are secured against hypotheca�on of specific vehicle purchased out of the proceeds of those loans. The loans are to be repaid as per the respec�ve repayment schedule in equal annual installments.

(c) Deposits from shareholders carrying interest rates in the range of 8.5% per annum to 12.5% per annum are repayable in 6 months to 3 years from the respec�ve dates of deposit.

(d) -Inter corporate deposits taken by subsidiary, Ethos Limited from related par�es amoun�ng to Rs. 517.00 (31 March 2017: Rs. 150.00, 1 April 2016: Rs. 150.00) carry an interest rate ranging between 10% to 16% per annum and are repayable within 3-36 months.

-Inter corporate deposits taken by subsidiary, Ethos Limited from others amoun�ng to Rs. 300.00 (31 March 2017: Rs. 300.00, 1 April 2016: Rs. 500.00) carry an interest rate ranging between 13.5% to 14% per annum and the same are repayable as per the repayment schedule within next two years.

-Inter corporate deposits taken by subsidiary, Mahen Distribu�on Limited from related par�es amoun�ng to Rs 150.00 (31 March 2017: Rs. 150.00, 1 April 2016: Rs. 150.00) carrying interest rate of 16% p.a. is repayable within two years.

(e) -Unsecured loans taken by subsidiary, Ethos Limited from related par�es amoun�ng to Rs. 70.00 (31 March 2017: Rs. 70.00, 1 April 2016: Rs. 70.00 ) carry an interest rate of 12.5% per annum and is repayable within 30 months.

- Unsecured loan from related party taken by subsidiary Pylania SA, amoun�ng to Rs. 72.43 (31 March 2017: Rs. 65.81, 1 April 2016: Rs. Nil ) is repayable before or on the expiry of the loan, i.e. 15 January 2018 subject to addi�onal one year renewal a�er wri�en consent of the par�es

- Unsecured loan from related party taken by subsidiary Pylania SA, amoun�ng to Rs. 35.30 (31 March 2017: Rs. Nil, 1 April 2016: Rs. Nil ) carrying interest rate of 4% is repayable before or on the expiry of the loan, i.e. 16 September 2019. This agreement will be automa�cally renewed for an addi�onal year.


197



- Unsecured loan from Radexpo AG by subsidiary Plyania SA amoun�ng to Rs. 71.27 (31 March 2017: Rs.Nil, 1 April 2016: Rs. Nil) carrying interest rate of 5% p.a. to be paid at the end of one year i.e. 14 August 2018.

- Loan from Independent sources taken by subsidiary Pylania SA, amoun�ng to Rs. 199.02 (31 March 2017: Rs. Nil, 1 April 2016: Rs. Nil ) carrying interest rate of 6% compaunded monthly is repayable within six months from 1 November 2017 .

- Unsecured loan from others taken by subsidiary Pylania SA, amoun�ng to Rs. Nil (31 March 2017: Rs. 343.97, 1 April 2016: Rs. Nil ) has been repaid in the current year.

Notes:

(a) - Working capital borrowings from banks amoun�ng to Rs. 1451.62 (31 March 2017: Rs. 247.72, 1 April 2016: Rs.

1,092.57) carrying interest rate varying from 9.10% per annum to 10.90% per annum are secured by hypotheca�on of

stocks of stores and spares, raw materials and components, finished goods and stock-in-process and book debts and

other assets of the Company (both present and future), on pari passu basis except packaging unit (KPAC) and are further

secured by a second charge on the en�re fixed assets of the Company. These loans are also guaranteed by the Chairman

& Managing Director of the Company and is repayable on demand.

-The cash credit overdra� facili�es taken by subsidiary company, Ethos Limited amoun�ng to Rs. 1,024.60 (31 March

2017: Rs. 1,909.79, 1 April 2016: Rs. 1,680.96 ) from IDBI Bank Limited are repayable on demand and are secured by first

parri passu charge on all the current assets of the subsidiary company both present and future and second parri passu

charge on the fixed assets of the subsidiary both present and future. These limits are also secured by exclusive mortgage

and charge on all the immovable fixed assets of the tool room unit (Eigen) at Bangalore of the Company. These limits are

guaranteed by the Company and personal guarantees of director of the subsidiary and his rela�ve. The rate of interest as

on 31 March 2018 varies from 11.25% to 11.50% (31 March 2017: 11.50% to 13.00%, 1 April 2016: 13%) per annum.

-The cash credit and overdra� facili�es taken by subsidiary company, Ethos Limited amoun�ng to Rs. 798.9 (31 March

2017: Rs. 739.97, 1 April 2016: Rs. 876.14 ) from The Jammu & Kashmir Bank Limited are repayable on demand and are

secured by first pari passu charge on the stock and receivables of the subsidiary company. These limits are also secured

by exclusive first charge on assets of KPAC unit at Chandigarh of the Parent Company. This is further secured by the first

and exclusive charge over land and building, plant and machinery and office equipment of the Parwanoo unit of the

Company. These loans are also guaranteed by the Company and personal guarantees of the director of the subsidiary

(ii) Current borrowingsNote

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

Loans repayable on demandFrom banks (secured) (a) 4,808.74 4,843.67 5,713.63

From banks (unsecured) (b) - 29.51 -

From others (secured) (c) 300.00 300.00 -

From others (unsecured) - - 400.00

DepositsDeposits from shareholders

From others (unsecured) (d) 88.24 28.72 104.01

Inter-corporate deposit (unsecured) 100.00 - -

Buyers credit from banks (secured)

(e)

1,057.28 741.13 598.25

6,354.26 5,943.03 6,815.89

198

(f)


company and his rela�ve. The rate of interest as on 31 March 2018 varies from 11.40% to 12.40% (31 March 2017:

12.20% to 12.30%, 1 April 2016: 12.25%) per annum.

-The cash credit and overdra� facili�es taken by subsidiary company, Ethos Limited amoun�ng to Rs. 1,533.60 (31 March

2017: Rs. 1,946.19, 1 April 2016: Rs. 2,063.95) from Bank of Maharashtra are repayable on demand and are secured by

first parri passu charge by way of hypotheca�on on en�re current assets of the subsidiary. These limits are also secured

by 360,000 shares of KDDL Limited held in the name of Sh. Yashovardhan Saboo and second parri passu charge on en�re

fixed assets of the subsidiary. Further, these limits are also guaranteed by the Parent Company and director of the

subsidiary and his rela�ve. The rate of interest as on 31 March 2018 is 11.50% (31 March 2017: 11.50%, 1 April 2016: Nil )

per annum.

(b) External commercial borrowing taken by subsidiary company Satva Jewellery & Design Limited amoun�ng to Rs. Nil (31

March 2017: Rs. 29.51 , 1 April 2016: Rs. Nil) is carrying interest rate of 2% above LIBOR.

(c) Working capital borrowings from others amoun�ng to Rs. 300.00 (31 March 2017: Rs. 300.00, 1 April 2016: Rs. Nil)

carrying interest rate of 9.15% per annum are secured by first pari passu charge on current assets. The loan is also

personally guaranteed by the Chairman and Mangaing Director of the Company and is repayable on demand.

(d) Deposits from shareholders amoun�ng to Rs. 88.24 (31 March 2017: Rs. 28.72, 1 April 2016: Rs. 104.01) carrying interest

rates in the range of 8.5% per annum to 12.5% per annum are repayable in 6 months to 3 years from the respec�ve dates

of deposit.

(e) Inter corporate deposits taken from Dream Digital Technology Limited amoun�ng to Rs 100.00 (31 March 2017: Rs. Nil, 1

April 2016: Rs. Nil) carrying interest rate of 9.00% p.a. is repayable within one year.

(f) - Buyers credit from Bank of India amoun�ng to Rs. 84.69 (31 March 2017: Rs. 79.81, 1 April 2016: Rs. Nil) carrying

interest rate 6 month libor plus 0.75% is secured against hypotheca�on of inventory and receivables is repayable on

demand. Buyers credit from IDBI amoun�ng to Rs. 295.13 (31 March 2017: Rs. 194.00, 1 April 2016: Rs. 77.07) carrying

interest rate varying from 3 month libor plus 0.90% to 6 month libor plus 1.00% is secured against hypotheca�on of

inventory and receivables is repayable on demand. Buyers credit from Corpora�on Bank amoun�ng to Rs. Nil (31 March

2017: Rs. Nil, 1 April 2016: Rs. 136.14 ) carrying interest rate varying from 6 month libor plus 1.17% to 6 month libor plus

1.59% is secured against hypotheca�on of inventory and receivables is repayable on demand.

- Buyers credit from IDBI Bank Limited taken by subsidiary company, Ethos Limited amoun�ng to Rs. 677.46 (31 March

2017 : Rs. 467.30; 1 April 2016 : Rs 385.00) are repayable on demand and are secured by first parri passu charge on all the

current assets of the subsidiary company both present and future and second parri passu charge on the fixed assets of

the Company both present and future. These limits are also secured by exclusive mortgage and charge on all the

immovable fixed assets of the tool room unit (Eigen) of the Company at Bangalore. These limits are guaranteed by the

Company, personal guarantees of director of the Company and rela�ve of the director. The rate of interest as on 31

March 2018 is 11.85% (31 March 2017 : 11.85 %; 1 April 2016 : 13%) per annum.


(iii) Reconcilia�on of movements of liabili�es to cash flows arising from financing ac�vi�es

Balance as at the beginning of the year (including current and non-current borrowings) 11,359.60 11,803.72

Changes from financing cash flowsProceeds from non-current borrowings* 1,643,97

Repayment of non-current borrowings* (1,215.23)

Proceeds from/repayments of current borrowings (net)

4,348.08

(2,319.88)

411.23 (872.86)

Balance as at the end of the year (including current and non-current borrowings) 13,799.03 11,359.60

* Non-current borrowings include current maturi�es of non-current borrowings



199


* not due for deposit to investor educa�on and protec�on fund

21 Provisions

Provisions for employee benefits (refer note 41 )

Liability for gratuity

Liability for compensated absences

Other provisions

Provisions for warran�es

20 Other financial liabili�es

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

Current maturi�es of non-current borrowings [refer note 19(i)]

-

-

1,789.36

1,693.15 Interest accrued

-

-

179.76

162.17

Unpaid dividends*

-

-

19.69

25.21

Capital creditors - -

74.20

74.87

Deriva�ves financial instruments (Fair value through Statement of Profit and Loss)

Employee related payables

20.97 -- -

825.30

Security deposit 9.55

-

-

-

9.55 - 3,058.25 2,780.70

Current Non-Current

36.98

24.37

61.35

2.15

2.15

63.50

48.50

33.38

81.88

3.59

3.59

85.47

154.44

196.21

350.65

359.50

8.85

8.85

48.46

217.56

266.02

12.55

12.55

278.57

61.55

252.98

314.53

20.89

20.89

335.42


Movement in other provisions Warran�es

Balance as on 1 April 2016 11.00







200

974.27

- - -

-

-

5.69

5.69

- - -

2,847.30

301.42

23.94

569.83

-

1,041.38

-

4,783.87

28.52

47.54

76.06

81.32

5.26

5.26

A provision for warranties is recognized when the underlying products are sold. The provision is based on historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when the claim will arise. Any recovery of cost incurred is netted off against the relevant cost.



22 Trade payables

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

Other trade payables 8,578.65

404.57 167.20 Other trade payables to related par�es (refer to note 42) 48.56

6,756.32 7,593.20

8,627.21 7,160.89 7,760.40

23 Other current liabili�es

Advance from customers 828.02 564.53 257.07

Statutory dues 238.24 485.55 460.34

Deferred revenue 183.96 143.77 135.22

1,250.22 1,193.85 852.63

24 Current tax liabili�es (net)

Provision for income tax (net of advance tax of Rs. 1173.91 (31 March 2017: Rs. 780.44, 1 April 2016: Rs. 318.74)

418.70

51.46

54.21

418.70 51.46 54.21

201


25 Revenue from opera�ons

49,007.97

44,796.71

Sale of products (including excise duty to the extent applicable)

673.35

530.23

Sale of services

Other opera�ng revenue

288.65

254.09

Export incen�ves

348.06

262.56

Scrap sales

50,318.03

45,843.59

26 Other income

Interest income

Fixed deposits with banks 49.82 60.18

Interest income from related par�es (refer note 42) 13.66 -

Interest income from others 116.88 137.01

Dividend incomeOther non-opera�ng income (net of expenses)

0.23 -

Year ended31 March

2018

Year ended31 March

2017


Rental income 11.27 16.47

Liabili�es/ Provision no longer required wri�en back 98.28 61.76

Exchange gain on foreign exchange fluctua�ons (net) - 157.59

Net gain on sale of property, plant and equipment 160.61 0.19

Miscellaneous income* 71.54 22.19 522.29 455.39

* includes insurance claim received of Rs. Nil (previous year Rs. 15.8)

27 Cost of materials consumed

Inventory of material at the beginning of the year 3,000.49 1,145.80

Purchases of raw materials and components 2,173.98 2,977.11

5,174.47 4,122.91

Inventory of material at the end of the year 1,410.04 1,122.42

3,764.43 3,000.49

202

28 Purchase of stock-in-trade

Purchase of stock-in-trade 27,240.22 25,655.33

27,240.22

25,655.33

29 Changes in inventories of finished goods, stock-in-trade and work-in-progress

Opening stock



Stock-in-trade 16,898.58 16,520.94

17,649.55 17,215.21


Year ended31 March

2018

Year ended31 March

2017


Less:

Closing stock



Stock-in-trade 17,387.87 16,898.58

18,464.98 17,649.55

Add : Increase/(decrease) in excise duty on finished goods (as applicable) -

(1.81)

(815.43) (436.15)

30 Employee benefits expense

Salaries, wages and bonus 5,891.29 5,365.45

Contribu�ons to provident and other funds 445.97 376.70

Share based payment expense 11.76 19.82

Staff welfare expenses 314.02 285.70

6,663.04 6,047.67

31 Finance costs

Interest expense on financial liabili�es measured at amor�sed cost 1,078.31 1,348.94

Other borrowing costs 124.61 81.73

1,202.92 1,430.67

203

32 Deprecia�on and amor�sa�on expense

Deprecia�on on property, plant and equipment (refer note 3) 1,174.82 1,105.13

Amor�sa�on of other intangible asset (refer note 4) 38.43 55.53

1,213.25 1,160.66

33 Other expenses

Stores and spares consumed

Power, fuel and water charges

Contractual labour expenses

Insurance

Rent (refer note 44)

Rates and taxes

Repair and maintenance

Legal and professional fees

Travelling and conveyance

Job charges

Prin�ng and sta�onery

704.45

592.64

492.38

446.85

540.68

364.43

52.60

68.10

2,619.11

2,922.17

25.63

41.92

439.63

457.05

657.19

492.23

584.23

516.67

487.44

368.33

61.67

49.26


Year ended31 March

2018

Year ended31 March

2017


Communica�on expenses

Commission

Events and exhibi�ons

Publicity and adver�sement

Property, plant and equipment wri�en off

Expected credit allowance on trade receivables

Dona�on

Advances / deposits wri�en offProvision for warranty (refer note 21)

Bank charges

Directors' si�ng fees

Security service charges

Service cost expense

Net change in fair value of financial assets (at FVTPL)

Corporate social responsibility expenditure

Miscellaneous expenses

Exchange loss on foreign exchange fluctua�ons (net)

34 Tax expense

A. Amounts recognised in statement of profit and loss

Current tax

Current year 743.44 348.84

Changes in es�mates related to prior years - 5.16

743.44 354.00

274.80

262.24

149.48

191.43

86.76

51.34

717.62

855.89

40.30

71.36

-

5.97

6.82

3.85

56.25

2.26

10.01

5.14

292.76

299.52

22.37

20.01

78.93

73.84

71.40

41.64

-

2.62

21.60

18.00

373.79

342.92

33.75

-

8,901.65

8,567.67

204

Deferred tax

A�ributable to–

Origina�on and reversal of temporary differences (36.08)

(36.08)

Tax expense for the year 707.36

B. Reconcilia�on of effec�ve tax rate

Profit before tax 2,527.02

Tax at the Indian tax rate of 34.61% (previous year 34.61%) 874.55

Effect of expenses that are not deduc�ble in determining taxable profit 26.30

Tax exempt income (55.58)

Effect of change in tax rate (135.48)

Others (2.44)

Income tax expenses recognised in statement of profit and loss 707.35

(181.57)

(181.57)

172.43

352.53

122.00

34.63

-

-

15.78

172.41


Year ended31 March

2018

Year ended31 March

2017


C. Income tax recognised in other comprehensive income

Arising on income and expenses recognised in other comprehensive income

Remeasurement of defined benefit liability (asset) 9.71 8.23

Exchange differences on transla�on of foreign opera�ons - -

9.71 8.23

Bifurca�on of the income tax recognised in other comprehensive income into

Items that will not be reclassified to profit or loss 9.71 8.23

Items that will be reclassified to profit or loss - -

9.71 8.23

35 Earning per share

A. Basic earnings per share

i. Profit/(loss) for basic earning per share of Rs. 10 each


ii. Weighted average number of equity shares (for basic)



10,849,822 10,511,183

Basic Earnings per share (face value of Rs. 10 each) 16.75 1.76

205

B. Diluted earnings per share

i. Profit/(loss) for diluted earning per share of Rs. 10 each

Profit for the year 1,817.06

ii. Weighted average number of equity shares (for diluted)

Balance at the beginning of the year 10,844,704

Effect of fresh issue of shares 5,118

Effect of employee stock op�ons* 11,228

10,861,050

Diluted earnings per share (face value of Rs. 10 each) 16.73

185.50

10,283,734

227,449

8,858

10,520,041

1.76

* 9,762 op�ons (previous year 12,142 op�ons) were excluded from calcula�on of diluted weighted average number of equity shares as their effect would have been an�-dilu�ve.



36 Explana�on to transi�on to Ind AS

As stated in Note 2(a)(i), these are the Group and its associates first financial statements prepared in accordance with Ind AS. For all periods up to and for the period ended 31 March 2017, the Group and its associates had prepared its financial statements in accordance with the Companies (Accounts) Rules, 2014, as no�fied under sec�on 133 of the Companies Act 2013, and other relevant provisions of the Act (Previous GAAP).

The accoun�ng policies set out in Note 2 have been applied in preparing these financial statements for the year ended 31 March 2018 including the compara�ve informa�on for the year ended 31 March 2017 and the opening Ind AS balance sheet on the date of transi�on i.e. 1 April 2016.

In preparing its Ind AS balance sheet as at 1 April 2016 and in presen�ng the compara�ve informa�on for the year ended 31 March 2017, the Group and its associates have adjusted amounts reported previously in financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Group and its associates in resta�ng its financial statements prepared in accordance with previous GAAP, and how the transi�on from previous GAAP to Ind AS has affected the Group and its associate's financial posi�on, financial performance and cash flows.

A. Op�onal exemp�ons

(i) Deemed cost for property, plant and equipment and intangible assets

Ind AS 101 permits a first-�me adopter to elect to con�nue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transi�on to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transi�on. This exemp�on can also be used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the Group and its associate has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value. Informa�on rela�ng to gross carrying amount of assets and accumulated deprecia�on as on the transi�on date as per previous GAAP is as follows:

Property, plant and equipment

Freehold

land

Leasehold

land

Buildings Leasehold

improvements

Plant and

equipment

Furniture and

fi�ngs

Office

equipment

Vehicles Total

Gross carrying amount as at 1 April 2016 82.63 584.98 1,881.01 1,155.09 9,914.67 1,725.85 257.19 416.50 16,017.92Accumulated deprecia�on as at 1 April 2016 - 16.82 (634.95) (723.26) (5,607.69) (969.47) (171.27) (230.29) (8,320.11)

Deemed cost as at 1 April 2016 82.63 601.80 1,246.06 431.83 4,306.98 756.38 85.92 186.21 7,697.81

Intangible assets

Technical

know-howSo�ware Web portal Goodwill Total

Gross carrying amount as at 1 April 2016 156.42 438.72 72.99 49.48 717.61 Accumulated amor�sa�on as at 1 April 2016 (152.26) (303.68) (59.96) (49.48) (565.38)

Deemed cost as at 1 April 2016 4.16 135.04 13.03 - 152.23

(ii) Investments in joint ventures

The Group and its associates has elected to measure the investment in the joint venture in Satva Jewellery and Design Limited in the consolidated financial statements at the deemed cost of the investment at the date of transi�on to Ind AS. Accordingly, the investment has been measured at the aggregate of the carrying amounts of the assets and liabili�es that had been previously propor�onately consolidated under the Previous GAAP for year ended 31 March 2016.

(ii) Business combina�ons

Ind AS 103 Business Combina�ons has not been applied to acquisi�ons of subsidiaries, or of interests in associates and joint ventures and transac�ons which are considered businesses for Ind AS, that occurred before 1

206


April 2016. The carrying amounts of assets and liabili�es in accordance with Previous GAAP are considered as their deemed cost at the date of acquisi�on. A�er the date of the acquisi�on, measurement is in accordance with Ind AS. The carrying amount of goodwill in the opening Ind AS Balance Sheet is its carrying amount in accordance with the Previous GAAP.

B. Mandatory excep�ons

(i) Es�mates

As per Ind AS 101, an en�ty's es�mates in accordance with Ind AS at the date of transi�on to Ind AS (i.e 1 April 2016) or at the end of the compara�ve informa�on period presented in the en�ty's first Ind AS financial statements (i.e 31 March 2017), shall be consistent with es�mates made for the same date in accordance with previous GAAP unless there is objec�ve evidence that those es�mates were in error. However, the es�mates should be adjusted to reflect any difference in accoun�ng policies.

As per Ind AS 101, where applica�on of Ind AS requires an en�ty to make certain es�mates the were not required under previous GAAP, those es�mates should be made to reflect condi�ons that exist at the transi�on date or at the end of the compara�ve period.

The Group and its associate's es�mates under Ind AS are consistent with the above requirement. The key es�mates considered in prepara�on of financial statements that was not required under previous GAAP are listed below:

- Fair valua�on of financial instruments carried at FVTPL

- Determina�on of the discounted value for financial instruments carried at amor�sed cost

- Impairment of financial assets based on expected credit loss model

(ii) Classifica�on and measurement of financial assets

Ind AS 101 requires an en�ty to assess classifica�on of financial assets on the basis of the facts and circumstances exis�ng as on the date of transi�on. Further, the standard permits measurement of financial assets accounted at amor�sed cost based on facts and circumstances exis�ng at the date of transi�on if retrospec�ve applica�on is imprac�cable.

Accordingly, the Group and its associates has determined the classifica�on of financial assets based on facts and circumstances that exist on the date of transi�on. Measurement of the financial assets accounted at amor�sed cost has been done retrospec�vely except where the same is imprac�cable.

(iii) De-recogni�on of financial assets and liabili�es

Ind AS 101 requires a first-�me adopter to apply the de-recogni�on provisions of Ind AS 109 prospec�vely for transac�ons occurring on or a�er the date of transac�on to Ind AS. However, Ind AS 101 allows a first �me adopter to apply the de-recogni�on requirements in Ind AS 109 retrospec�vely from the date of the en�ty’s choosing, provided that the informa�on needed to apply Ind AS 109 to financials assets and liabili�es derecognised as a result of past transac�on was obtained at the �me of ini�ally accoun�ng for those transac�ons.

As permi�ed by Ind AS 101, the Group and its associates has elected to apply the de-recogni�on provisions of Ind AS 109 prospec�vely from the date of transi�on to Ind AS.


207



C. Reconcilia�on of equity

Previous GAAP*

Transi�on to

Ind AS

Ind AS Previous GAAP*

Transi�on to

Ind AS

Ind AS

ASSETS


208

Non-current assets

Property, plant and equipment (b)

Capital work-in-progress


Equity accounted investees

Financial assets

- Investments

- Loans

- Other financial assets

Current tax assets

Deferred tax assets (net)

Other non-current assets

Total non-current assets

Current assets

Inventories

Financial assets

- Trade receivable

- Cash and cash equivalents

- Other bank balances

- Loans

- Other financial assets

Other current assets

Total current assets

Total assets

Equity and Liabili�es

Equity

Equity share capital

Other equity

(a), (b)

(b), (c) , (d)

(n)

(c), (d), (l)

(e)

(e)

(b)

(g) (d), (g)

Equity a�ributable to owners of the Company

Non-controlling interests

Total equity

7,755.36

295.24

152.23

27.14

51.75

1,243.04

168.17

604.92

284.92

365.04

10,947.81

18,496.72

2,585.87

617.98

455.00

482.76

90.39 765.65

23,494.37

34,442.18

1,017.20

8,284.77

3,282.41##

11,567.18

(57.55)

-

-

25.44

(0.47)

(286.04)

-

(0.27)

207.00

(111.89)

142.26

(222.24)

(0.21)

(4.64)

(11.30)

6.09 71.49

(18.55)

(130.44)

-

359.74

-

359.74

7,697.81

295.24

152.23

52.58

51.28

957.00

168.17

604.65

572.04

10,835.92

18,638.98

2,363.63

617.77

450.36

471.46

96.48 837.14

23,475.82

34,311.74

1,017.20

8,644.51

3,282.41

11,926.92

7,796.68

481.25

107.32

28.06

-

51.75

1,076.13

85.86

709.59

447.56

11,240.64

18,797.07

2,962.16

1,156.35

867.32

414.31

31.70 723.74

24,952.65

36,193.30

1,092.67

10,211.66

3,496.36##

13,708.02

-

-

-

-

(3.09)

(219.29)

-

-

71.41

201.30

50.33

223.19

(348.54)

-

-

(11.30)

- 5.33

(131.32)

(80.99)

-

524.43

15.16

539.59

7,796.68

481.25

107.32

28.06

48.66

856.84

85.86

709.59

527.85

648.86

11,290.97

19,020.26

2,613.63

1,156.35

867.32

403.01

31.70

729.07

24,821.34

36,112.31

1,092.67

10,736.07

3,511.52

14,247.59


(b)

(b)

- 284.92 456.44

(b)

(b)

7,267.57 359.74 7,627.31 9,118.94 524.43 9,643.40


Previous GAAP*

Transi�on to

Ind AS

Ind AS Previous GAAP*

Transi�on to

Ind AS

Ind AS

Par�culars

Note

As at 1 April 2016 (Transi�on date) As at 31 March 2017

209

Liabili�es

Non-current liabili�es


- Borrowings


Provisions

Deferred tax liabili�es (net)

Total non-current liabili�es

Current liabili�es


- Borrowings

- Trade payables


Other current liabili�es

(l)

(m)

(m), (n)

(g)

(b), (f), (g)

Provisions

Current tax liabili�es (net)

Total current liabili�es

Total liabili�es

Total equity and liabili�es

3,304.88

281.03

359.50

589.08

4,534.49

6,839.91 7,777.37 2,780.70

824.82

63.50 54.21

18,340.51

22,875.00

34,442.18

3,294.68

-

359.50

403.31

4,057.49

6,815.89 7,760.40 2,780.70 852.63

63.50 54.21

18,327.33

22,384.82

34,311.74

(10.20)

(281.03)

-

(185.77)

(477.00)

(24.02) (16.97)

-

27.81 -

-

(13.18)

(490.18)

(130.44)

3,636.93

310.03

278.57

807.02

5,032.55

5,943.03 7,160.89 3,037.28

1,174.62

85.47 51.46

17,452.75

22,485.30

36,193.29

3,627.21

9.55

278.57

456.44

4,371.77

5,943.03 7,160.89 3,058.25

1,193.85

85.47

51.46

17,492.95

21,864.72

36,112.31

(9.72)

(300.48)

-

(350.58)

(660.78)

- -

20.97

19.23 - -

40.20

(620.58)

(80.99)

* The previous GAAP figures have been reclassified to conform to Ind AS presenta�on requirements for the purpose of this note.# Includes revalua�on surplus of Rs. 117.28 as transferred to retained earnings in accordance with Ind AS 101.## Includes reclassifica�on of Rs. 128.88 towards adjustment from non-controlling interest to retained earnings.


(b)

(b)


D. Reconcilia�on of total comprehensive income for the year ended 31 March 2017

Previous GAAP* Ind AS

Ind AS

Par�culars

Note

As at 31 March 2017

210

Transi�on to


Revenue from opera�ons

Other income

Total income

Expenses

Cost of materials consumed

Excise duty on sales

Purchase of stock-in-trade

Changes in inventories of finished goods and work in progress

Employee benefits expense

Finance costs

Deprecia�on and amor�za�on expense

Other expenses

Total expenses

Profit before share of equity accounted investees and income tax

Share of profit of equity accounted investees (net of income tax)

Profit before income tax

Income tax expense:

Current tax

- Current year

- Changes in es�mates related to previous year

Deferred tax

Profit for the year

Other comprehensive income / (expense)

Items that will not be reclassified subsequently to profit or loss

Remeasurement of defined benefit liability / (asset)

Income tax on remeasurement of defined benefit liability / (asset)

(b), (e), (f), (o)

(b), (d)

(o)

(e)

(h)

(b)

(a), (b), (c), (d), (f), (g), (l), (m)

(b)

(m), (n)

(k)

(k)

Items that will be reclassified subsequently to profit or loss:

Exchange differences on transla�on of foreign opera�ons

Income tax on exchange differences on transla�on of foreign opera�ons

Other comprehensive income / (expense) for the year

Total comprehensive income / (expense) for the year

45,474.82

385.16

45,859.97

3,000.49

-

25,655.33

(355.22) 6,067.90 1,423.05 1,166.70

8,493.36

45,451.61

408.36

0.91

409.27

348.84

5.16

46.40

8.88

-

-

-

-

-

8.88

368.77

70.23

439.01

-

520.10

-

(80.93) (20.23)

7.62 (6.04)

74.32

494.84

(55.83)

4.47

(51.36)

-

-

(227.97)

176.60

(26.13)

8.23

(43.42)

-

(61.33)

115.28

45,843.59

455.39

46,298.98

3,000.49

520.10

25,655.33

(436.15)

6,047.67

1,430.67

1,160.66

8,567.68

45,946.45

352.53

5.38

357.91

348.84

5.16

(181.57)

185.48

(26.13)

8.23

(43.42)

-

(61.32)

124.16


(b)

(j)

E. Statement of Cash Flows

Other than effect of certain reclassifica�ons due to difference in presenta�on, there was no other material effect of cash flow from opera�ng, financing, inves�ng ac�vi�es for all periods presented.

Notes to reconcilia�on:

(a) Investments in equity shares of other companies

Under Previous GAAP, the investments in equity shares of other companies were measured at cost or market value, whichever is lower. Under Ind AS, the Company has designated these investments at fair value through profit or loss (FVTPL). Accordingly, these investments are required to be measured at fair value.

(b) Investment in the joint venture using equity method:

Under Previous GAAP, the investment in the joint venture in Satva Jewellery and Design Limited ("Satva") was propor�onately consolidated along with the consolidated assets and liabili�es. Under Ind AS, the investment in Satva will be measured using the equity method. At the date of transi�on to Ind AS, the following previously propor�onately consolidated assets and liabili�es and items of Income and expenditure under Previous GAAP have been aggregated into a single line investment balance in the joint venture at the date of transi�on to Ind AS.




31 March 2017

Net change in fair value of financial assets (at FVTPL) (2.62)


As at

31 March 2017

As at

1 April 2016

Asset: Investments (Non-current) (3.09) (0.47)


Balance sheet



31 March 2017


Other income (1.19)

Finance costs 6.62

Deprecia�on and amor�za�on expense 6.04

Other expenses 0.54

Share of profit of joint venture in current year 4.47


The following items of income and expenditure were previously propor�onately consolidated under Previous GAAP:



211




31 March 2017

Interest income from financial assets at amor�sed cost 80.68 Rent expense (86.17)




As at

31 March 2017

As at

1 April 2016

Asset: Property, plant and equipment - (57.55)

Asset: Loans - (0.52)

Asset: Cash and cash equivalents - (0.21)

Asset: Other bank balances - (4.64)

Asset: Other financial assets - (3.49)

Asset: Income tax asset (net) - (0.27)

Asset: Investments (non-current) - 25.44

Liabili�es: Borrowings - (24.02)

Liabili�es: Trade payables - (16.97)

Liabili�es: Other current liabili�es - (0.25)

Adjustment to retained earnings - -

Balance sheet

The following items of assets and liabili�es were previously propor�onately consolidated under Previous GAAP:

C. Loans to employees

Under the previous GAAP, loans to employees are recorded at their transac�on value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the company has fair valued the loans to employees under Ind AS.


(d) Security deposit

Under the previous GAAP, interest free security deposits are recorded at their transac�on value. On transi�on to Ind AS, these security deposits are remeasured at amor�sed cost using the effec�ve interest rate method. The difference between the transac�on value of the deposit and amor�sed cost is regarded as prepaid rent and recognised as expenses uniformly over the lease period. Interest income, measured by the effec�ve interest rate method is accrued.

As at

31 March 2017

As at

1 April 2016

Asset: Loans (12.80) (12.24)



Balance sheet

212



31 March 2017

Net change in fair value of financial assets (at FVTPL) -

Adjustment before income tax - Profit / (loss)


-

As at

31 March 2017

As at

1 April 2016

Asset: Loans (217.79) (284.58) Asset: Prepaid expense (other non-current assets) 187.00 193.82 Asset: Prepaid expense (other current assets) 14.00 79.46 Adjustment to retained earnings (16.79)

(11.30)

Balance sheet


(e) Deferment of revenue recogni�on

Under Previous GAAP, revenue is recognised when the seller has transferred the property in goods. Under Ind AS, when the receipt of the revenue from a par�cular sale is con�ngent on the ul�mate collec�on by the buyer from the ul�mate sale of the goods then revenue is not recognised as the en�ty is deemed to con�nue to retain significant risks of ownership.



31 March 2017

Sale of product (gross) (126.30)

Changes in inventories of finished goods and work in progress 80.93


As at

31 March 2017

As at

1 April 2016Asset: Inventories 223.19 142.26

Asset: Trade receivable (348.54) (222.24)


Balance sheet


213

(f) Deferred revenue-customer loyalty program

The Group operates a loyalty points programme, which allows customers to accumulate points when they purchase products in the Company’s retail stores. Under previous GAAP, the Group creates a provision toward its liability under the customer loyalty program. Under Ind AS, considera�on received is allocated between the products sold (watches) and the points issued, with the considera�on allocated to points equal to their fair value. Fair value of the points is determined by applying a sta�s�cal analysis. The fair value of the points issued is deferred and recognised as revenue when the points are redeemed.



31 March 2017

Sale of product (gross) (8.54)

Publicity and adver�sement 5.72




(g) Deriva�ve instruments - foreign exchange forward contracts

Under previous GAAP, deriva�ves (forward exchange contract) were being restated at closing rate as on the repor�ng date. Under Ind AS, these deriva�ves are being measured at fair value i.e. valued at mark to market price.


As at

31 March 2017

As at

1 April 2016

Liabili�es: Deferred revenue 47.44 44.62


Balance sheet


31 March 2017

Fair Value loss on foreign exchange forward contracts (19.59)


As at

31 March 2017

As at

1 April 2016

Assets: Foreign exchange forward contracts (other financial assets) - 9.58

Assets: Unamor�zed premium on forward contracts (other current assets) (8.67) (7.97)

Liabili�es: Forward contract payable (other current liabili�es) (28.22) (16.56)

Liabili�es: Foreign exchange forward contracts (other financial liabili�es) 20.97 -

Adjustment to retained earnings (1.42) 18.17


Balance sheet


214

(h) Employee stock op�ons outstanding reserve

Under the previous GAAP, the cost of equity-se�led employee share based plan were recognized using the intrinsic value method. Under Ind AS, the cost of equity se�led share based plan is recognized based on the fair value of the op�ons as at the grant date.



31 March 2017

Employee benefit expense 25.86


As at

31 March 2017

As at

1 April 2016

Other equity: Share based payment reserve 94.62 68.76



Balance sheet



(i) Government grant

Under previous GAAP, the government grants rela�ng to property, plant and equipment were recognized as capital reserve. Under Ind AS, such grants are recognized as deferred income and credited to Statement of Profit and Loss on a systema�c basis over the useful life of asset. As at the date of transi�on, such grants have been adjusted against retained earnings. This has not resulted in any change in the total equity as at 31 March 2016 and 31 March 2017.


(j) Adjustments pertaining to Transla�on Differences

Under previous GAAP, the transla�on difference arising from conversion of func�onal currency of the subsidiaries to repor�ng currency of the parent company was transferred to Foreign Currency Transla�on Reserve. Under Ind AS, the transla�on difference is transferred to other comprehensive income.

As at

31 March 2017

As at

1 April 2016

Equity: Other equity (Investment subsidy) (55.00) (55.00)


Balance sheet

215

(k) Defined Benefit Plans

Under Ind AS, re-measurements i.e. actuarial gains and losses and the return on plan assets on the net defined benefit obliga�on are recognized in other comprehensive income instead of profit or loss. Under the previous GAAP, these re-measurements were forming part of the profit or loss for the year. As a result of this change, actuarial loss (net of tax) amoun�ng to Rs. 39.13 has been recognized in other comprehensive income instead of profit or loss. There is no impact on the total equity as at 01 April 2016 and 31 March 2017.

(l) Borrowings

Under Previous GAAP, the transac�on costs incurred towards origina�on of borrowings were charged to Statement of Profit and Loss as and when incurred. Under Ind AS, these transac�on costs are to be deducted from the carrying amount of borrowings on ini�al recogni�on. These costs are recognized in the Statement of Profit and Loss over the tenure of the borrowing by applying the effec�ve interest rate method.



31 March 2017

Other expenses 0.08


As at

31 March 2017

As at

1 April 2016

Asset: Prepaid expense (other non-current assets) (0.38) (0.94)

Liabili�es: Borrowings (Non-current) (9.72) (10.20)



Balance sheet


(m) Reversal of lease equalisa�on reserve

Under Previous GAAP, lease rentals on opera�ng leases were required to be recognised as expense on straight line basis over the lease term by recognising corresponding lease equalisa�on reserve. There is no such requirement unless specific circumstances as specified under Ind AS.



216


31 March 2017

Rent expense (19.45)

Deferred tax charge/(credit) 6.73


As at

31 March 2017

As at

1 April 2016

Liabili�es: Deferred lease rental (other financial liabili�es) (300.48) (281.03)

Liabili�es: Deferred tax liabili�es (net) 103.98 97.26



Balance sheet

(n) Deferred taxes

Previous GAAP requires deferred tax accoun�ng using the income statement approach, which focuses on differences between taxable profits and accoun�ng profits for the period. Ind AS 12 requires en��es to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The applica�on of Ind AS 12 approach has resulted in recogni�on of deferred tax on new temporary differences which was not required under previous GAAP.



31 March 2017

Deferred tax charge/(credit) (242.93)


As at

31 March 2017

As at

1 April 2016

Assets: Deferred tax assets (net) 71.41 -

Liabili�es: Deferred tax liabili�es (net) (597.37) (283.03)



Balance sheet


(o) Excise duty on sales

Under Previous GAAP, excise duty was ne�ed off against sale of goods. Under Ind AS, excise duty is included in sale of goods and is separately presented as expense on the face of Statement of Profit and Loss. Thus, sale of goods under Ind AS has increased with a corresponding increase in expenses.



31 March 2017


Excise duty 520.10


F. Total equity reconcilia�on

Note

As at

31 March 2017

As at

1 April 2016

Reported earlier under Previous GAAP 13,708.00 11,567.18

Investment (3.09) (0.47)

Loans to employees 1.88 1.88

Security deposit (16.79) (11.30)

Deferment of revenue recogni�on (125.35) (79.98)

Deferred revenue-customer loyalty program (47.44) (44.62)

Deriva�ves (1.42) 18.17

Borrowings 9.34 9.26

Reversal of lease equalisa�on reserve 196.50 183.77


Tax adjustments 525.96 283.03

14,247.59 11,926.92


217


(a), (b)

(c)

(d)

(e)

(f)

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(l)

(n)

(m)


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218

37

Par�culars Level

Non-current borrowings (including current maturi�es) 3

Reconcilia�on of Level 3 fair value measurement:

Opening balance

Gain/ (loss) recognized in Statement of profit and loss

Closing balance

There are no transfers between Level 1, Level 2 and Level 3 during the years ended 31 March 2018 and 31 March 2017.

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

7,285.34

5,365.45

4,899.35

7,444.77

5,416.57

4,987.83

48.66 51.28

- (2.62)

48.66 48.66

Year ended

31 March 2017

Year ended

31 March 2018

Fair value Amor�sed cost

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016


219

B. Financial risk management

(i) Risk Management framework

The Holding Company’s board of directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk management policies are established to iden�fy and analyse the risk faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to effect changes in market condi�ons and Group's ac�vi�es. The Group, through its training and management standards and procedures, aims to maintain discipline and construc�ve control environment in which all employees understand their roles and obliga�ons.

The Group’s audit commi�ee oversees how management monitors compliance with Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in rela�on to risk faced by the Group. The audit commi�ee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the result of which are reported to audit commi�ee.

The Group has exposure to the following risks arising from financial instruments:

-credit risk (see (ii))

-liquidity risk (see (iii))

-market risk (see (iv))

-product prices risk (see (v))

(ii) Credit Risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obliga�ons. The carrying amount of financial assets represents the maximum credit risk exposure and arises principally from the Group and its associate's receivable from customers and loans.

Par�culars As at

31 March 2018

As at

31 March 2017

As at

1 April 2016 Investments 48.66 48.66 51.28 Trade receivables 3,264.21 2,613.63 2,363.63 Loans 1,504.92 1,259.85 1,428.46 Cash and cash equivalents 1,127.60 1,156.35 617.77 Other bank balances 672.96 867.32 450.36 Other financial assets 265.62 117.56 264.65

6,883.97 6,063.37

5,176.15



The Group has established a credit policy under which each new customer is analysed individually for creditworthiness before the payment and delivery terms and condi�ons are offered. The Group's review includes external ra�ngs, if they are available, financial statements, credit agency informa�on, industry informa�on and business intelligence. Sale limits are established for each customer and reviewed annually. Any sales exceeding those limits require approval from the appropriate authority as per policy. In monitoring customer credit risk, customers are grouped according to their credit characteris�cs, including whether they are an individual or a legal en�ty, whether they are a ins�tu�onal, dealers or end-user customer, their geographic loca�on, industry, trade history with the Group and existence of previous financial difficul�es. The Group’s retail business is pre-dominantly on cash and carry basis which is largely through credit-card collec�ons. The credit risk on such collec�ons is minimal, since they are primarily owned by customers’ card issuing banks.

220

As at

1 April 2016

1,291.03

1,072.60

2,363.63

The Group based on internal assessment which is driven by the historical experience/ current facts available in rela�on to default and delays in collec�on thereof, the credit risk for trade receivables is considered low. The Group es�mates its allowance for trade receivable using life�me expected credit loss. Individual receivables which are known to be uncollec�ble are wri�en off by reducing the carrying amount of trade receivable and the amount of the loss is recognised in the Statement of Profit and Loss within other expenses.

Carrying amount

3,150.40 113.81

3,264.21

2,581.33 32.30

2,613.63

2,300.83 62.80

2,363.63

The movement in the allowance for impairment in respect of trade receivables and loans is as follows

As at31 March 2017

9.09 (1.61) 1.31 8.79

The following table provides informa�on about the exposure to credit risk and expected credit loss for trade receivables.

As at

31 March 2018

As at

31 March 2017

Within India 1,520.32 1,228.73

Outside India 1,743.89 1,384.90

3,264.21 2,613.63

The Group’s exposure to credit risk for trade receivables by geographic region is as follows:

Par�culars Gross carrying amount Loss allowance

31 March 2018Less than 6 Months 3,150.40 - More than 6 Months 120.61 6.80

3,271.01 6.80 31 March 2017Less than 6 Months 2,581.33 - More than 6 Months 41.09 8.79

2,622.42 8.79 1 April 2016Less than 6 Months 2,300.83 - More than 6 Months 71.89 9.09

2,372.72 9.09

As at31 March 2018

8.79 Amounts wri�en off (2.09)Impairment loss recognised 0.10 Balance as at the end of the year 6.80

Balance as at the beginning of the year



The following table provides details regarding the contractual maturi�es of significant financial liabili�es:


31 March 2018

Non-deriva�ve financial liabili�esBorrowings (including current maturi�es) 6,354.26 2,847.30 4,601.98 13,803.54 Trade payables 8,627.21 - - 8,627.21 Other financial liabili�es 1,936.57 - 5.69 1,942.26

Deriva�ve financial liabili�esForward contracts - - - -

16,918.04 2,847.30 4,607.67 24,373.01 31 March 2017

Non-deriva�ve financial liabili�esBorrowings (including current maturi�es) 5,943.03 1,789.36 3,617.49 11,3459.88 Trade payables 7,160.89 - - 7,160.89 Other financial liabili�es 1,247.92 - 9.55 1,257.47

Deriva�ve financial liabili�esForward contracts 20.97 - - 20.97

14,372.81 1,789.36 3,627.04 19,789.21

221

Investments of surplus funds are made only with approved counterpar�es and within credit limits assigned to each counterparty. The limits are set to minimise the concentra�on of risks and therefore mi�gate financial loss through counterparty’s poten�al failure to make payments. The loans primarily represents security deposits given and loans given to employees. The Group also carries credit risk on lease deposits with landlords for store proper�es taken on leases, for which agreements are signed and property possessions �mely taken for store opera�ons. The risk rela�ng to refunds a�er store shut down is managed through successful nego�a�ons or appropriate legal ac�ons, where necessary. The management believes these to be high quality assets with negligible credit risk. The management believes the par�es to which these deposits and loans have been given have strong capacity to meet the obliga�ons and where the risk of default is negligible or nil and accordingly no provision for expected credit loss has been provided on these financial assets. Credit risk on cash and cash equivalents and bank deposits is limited as the Group generally invests in deposits with banks with high credit ra�ngs assigned by domes�c credit ra�ng agencies.

(iii)Liquidity Risk

Liquidity risk is the risk that the Group will encounter difficulty in mee�ng the obliga�ons associated with its financial liabili�es that are se�led by delivering cash or another financial assets. The Group’s approach to manage liquidity is to have sufficient liquidity to meet its liabil�es when they are due, under both normal and stressed circumstances, without incurring unacceptable losses or risking damage to the Group’s reputa�on.

The Group believes that its liquidity posi�on, including total cash and cash equivalents and other bank balances an�cipated future internally generated funds from opera�ons will enable it to meet its future known obliga�ons in the ordinary course of business. However, if a liquidity needs were to arise, the Group believes it has access to financing arrangements, value of unencumbered assets, which should enable it to meet its ongoing capital, opera�ng, and other liquidity requirements. The Group will con�nue to consider various borrowing or leasing op�ons to maximize liquidity and supplement cash requirements as necessary.


1 April 2016

Non-deriva�ve financial liabili�esBorrowings (including current maturi�es) 6,815.89 1,693.15 3,284.48 11,793.52 Trade payables 7,760.40 - - 7,760.40 Other financial liabili�es 1,087.55 - - 1,087.55

Deriva�ve financial liabili�esForward contracts - - - -

15,663.84 1,693.15 3,284.48 20,641.47



(iv) Market Risk Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market

prices. Market risk comprises two types of risk namely: currency risk and interest rate risk. The objec�ve of market risk management is to manage and control market risk exposures within acceptable parameters, while op�mising the return.

a. Interest rate risk Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in

market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s borrowings with floa�ng interest rates.

Exposure to interest rate risk The Group is exposed to interest rate risk because funds are borrowed at both fixed and floa�ng interest rates.

Interest rate risk is measured by using the cash flow sensi�vity for changes in variable interest rate. The borrowings of the Group are principally denominated in rupees and US dollars with a mix of fixed and floa�ng rates of interest. The risk is managed by the Group by maintaining an appropriate mix between fixed and floa�ng rate borrowings. The exposure of the Group’s borrowing to interest rate changes as reported to the management at the end of the repor�ng period are as follows:

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

Fixed rate borrowings 8,994.80 6,506.21 6,079.89

Floa�ng rate borrowings 4,808.74 4,843.67 5,713.63

13,803.54 11,349.88 11,793.52

Strengthening WeakeningFor the year ended 31 March 2018Interest rate (0.5% movement) (24.05) 24.05

For the year ended 31 March 2017Interest rate (0.5% movement) (24.22) 24.22

Profit or Loss

Interest rate sens�vity analysisA reasonably possible change of 0.50 % in interest rates at the repor�ng date would have affected the pro� or loss by the amounts shown below. This analysis assumes that all other variables, in par�cular foreign currency exchange rates, remain constant

222


Total borrowngs (gross of transac�on cost)

b. Foreign currency risk

Foreign currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group is exposed to the effects of fluctua�on in the prevailing foreign currency exchange rates on its financial posi�on and cash flows. Exposure arises primarily due to exchange rate fluctua�ons between the func�onal currency and other currencies from the Group’s opera�ng, inves�ng and financing ac�vi�es.


Unhedged foreign currency exposureThe following table provides details of the Group's exposure to currency risk:

Assets As at

31 March 2018

As at 31 March

2017

As at 1 April

2016

Trade receivablesHKD 7.77 5.38 4.00 USD 132.43 151.12 120.24 EUR 119.85 15.77 15.98 CHF 1,215.78 968.03 926.14 GBP 0.82 - 0.50

Liabili�es As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

BorrowingsUSD 379.82 273.81 213.21

Trade payablesHKD 13.67 23.65 31.61 USD 69.79 32.71 48.71 EUR 70.36 9.43 10.13 CHF 2,442.84 1,730.40 1,010.56 JPY - 8.58 0.75 GBP 0.95 - - SGD 75.55

20.41

34.88

Net exposure in respect of recognised assets and liabili�es (in Rs.) (1,576.33) (958.69) (282.99)

Significant forward contracts outstanding as at the end of the year

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

ImportsCHF - - 424.75 USD 687.89 499.70 403.51

223



Sensi�vity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against below currencies at 31 March 2018 and 31 March 2017 would have affected the measurement of financial instruments denominated in foreign currency and affected Statement of Profit and Loss

(v) Product price risk

In a poten�ally infla�onary economy, the Group expects periodical price increases across its retail product lines. Product price increases which are not in line with the levels of customers’ discre�onary spends, may affect the business/retail sales volumes. Since the Group operates in luxury category, the demand is reasonably inelas�c to changes in price. However, the Group con�nually monitor and compares prices of its products in other developed markets as its customers tend to compare prices across markets. In the event that prices deviate significantly unfavorably from the markets, the Group nego�ates with its principals for change of prices. The Group also manages the risk by offering judicious product discounts to retail customers to sustain volumes. The Group nego�ates with its vendors for purchase price rebates such that the rebates substan�ally absorb the product discounts offered to the retail customers. This helps the Group protect itself from significant product margin losses.

38 Capital Management

(i) Risk management

The Group's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.

Par�culars

Strengthening Weakening Strengthening Weakening

31 March 2018

HKD (1% movement) (0.06) 0.06 0.04 (0.04) USD (1% movement) (3.17) 3.17 2.07 (2.07) EUR (1% movement) 0.49 (0.49) (0.32) 0.32 CHF (1% movement) (12.27) 12.27 8.02 (8.02) JPY (1% movement) - - - - GBP (1% movement) - - - - SGD (1% movement) (0.76) 0.76 0.49 (0.49)

31 March 2017

HKD (1% movement) (0.18) 0.18 0.12 (0.12) USD (1% movement) (1.55) 1.55 1.02 (1.02) EUR (1% movement) 0.06 (0.06) (0.04) 0.04 CHF (1% movement) (7.62) 7.62 4.99 (4.99) JPY (1% movement) (0.09) 0.09 0.06 (0.06) SGD (1% movement) - - - - GBP (1% movement) - - - -

Profit or Loss Equity, net of tax

224

SEK (1% movement) (0.20) 0.20 0.13 (0.13)


The Group monitors capital using a ra�o of 'adjusted net debt' to 'total equity'. For this purpose, adjusted net debt is defined as total liabili�es, comprising interest-bearing loans and borrowings, less cash and cash equivalents and other bank balances. Total equity comprises all components of equity as shown in balance sheet.


The Group's adjusted net debt to total equity ra�o was as follows:

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

Total liabili�es 26,832.48 21,864.72 22,384.82 Less: cash and cash equivalents and other bank balances 1,800.56 2,023.67 1,068.13 Adjusted net debt 25,031.92 19,841.05 21,316.69

Total equity 16,165.09 14,247.59 11,926.92

Net debt to total equity ra�o 1.55 1.39 1.79

(ii) Dividends

31 March 2018 31 March 2017

Equity shares

195.70 151.28

Dividend not recognised at the end of the repor�ng period 330.10 195.70

Final dividend for the year ended 31 March 2017 of Rs. 1.50 (1 April 2016 of Rs. 1.50) per fully paid equity shares

In addi�on to the above dividends, since year end the directors have recommended the payment of a final dividend of Rs. 2.50 (31 March 2017: Rs. 1.50) per fully paid equity share. This proposed dividend is subject to the approval of shareholders in the ensuing annual general mee�ng.

225



39 Non-controlling interest (NCI)

The following table summarises the informa�on rela�ng to each of the Group’s subsidiaries that has material NCI, before any intra-group elimina�ons:

As at 31 March 2018

Par�culars Ethos Limited Pylania SA

NCI Percentage 21.32% 15.00% 1.28%

Non-current assets 4,006.46 574.55 840.03

Current assets 20,975.72 448.35 499.32

Non-current liabili�es 1,251.53 - 150.00

Current liabili�es 14,569.69 926.30 521.69

Net Assets 9,160.96 96.60 667.66

Preference share capital 750.00 - -

Arrears of preference dividend 354.51 - -

Exchange differences on transla�on of foreign opera�ons - 123.84 -

8,056.45 220.44 667.66

Net assets a�ributable to NCI (including preference share capital and its arrears a�ributable to NCI)

2,785.53 172.18 8.56

Revenue 35,609.19 740.60 589.36

Profit / (Loss) for the year 399.63 126.27 (37.96)

OCI 4.40 42.59 -

Total Comprehensive income 404.03 168.86 (37.96)

Profit / (Loss) allocated to NCI 86.46 18.94 (0.49)

OCI allocated to NCI 0.47

6.39

-

Total Comprehensive income allocated to NCI 86.93

25.33

(0.49)

Cash flows from opera�ng ac�vi�es (114.94) 110.91 22.96

Cash flows from inves�ng ac�vi�es (1,178.79) 52.90 -

Cash flows from financing ac�vi�es 1,106.66 (81.33) -

Net increase in cash and cash equivalents (187.07) 82.49 22.96

As at 31 March 2017

NCI Percentage 18.23% 15.00% -


Current assets 18,519.39 776.35 37.08

Non-current liabili�es 1,188.88 640.84 150.00


6,483.66 664.87 705.52

Mahen Distribu�on

Limited

Par�culars Ethos Limited Pylania SA Mahen Distribu�on

Limited

226

Net Assets


Net Assets

Preference share capital 1,960.01 - 178.12

Arrears of preference dividend 911.84 - 100.93


3,611.81 831.30 426.47


3,267.71 146.85 96.96

Revenue 32,489.41 1,179.82 5.23

Profit / (Loss) for the year (608.67) 533.85 (22.88)

OCI (15.21) (41.47) -

Total Comprehensive income (623.88) 492.38 (22.88)

Profit / (Loss) allocated to NCI (105.03) 80.08 -

OCI allocated to NCI (2.77) (6.22) -

Total Comprehensive income allocated to NCI (107.80) 73.86 -

Cash flows from opera�ng ac�vi�es 405.77 204.20 (15.89)

Cash flows from inves�ng ac�vi�es (209.61) (17.54) -

Cash flows from financing ac�vi�es 243.73 (130.50) -

Net increase in cash and cash equivalents 439.89 56.15 (15.89)

Par�culars Ethos Limited Pylania SA Mahen Distribu�on

Limited


As at 1 April 2016

Par�culars Ethos Limited Pylania SA

NCI Percentage 19.48% 15.00% -


Current assets 17,998.77 90.43 62.94

Non-current liabili�es 1,105.00 753.91 150.00


Net Assets 5,884.19 172.49 728.39

Preference share capital 1,960.01 - 178.12

Arrears of preference dividend 661.64 - 131.91


3,262.54 297.45 418.36


3,009.86 73.00 199.55

Mahen Distribu�on

Limited

227


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228



40 Con�ngent liabili�es and commitments:

(to the extent not provided for)

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

(i) Claims against the Company not acknowledged as debts, under dispute

6,269.65

6,634.78

512.95

84.48

47.95

18.35

3.73

3.73

3.73

267.76

411.74

945.94

170.16

23.42

21.38

192.02

175.44

164.58

- Surety bonds in favour of sales tax department -

-

1.00

- Bonds in favour of central excise and customs authori�es -

-

14.25

0.54

102.19

102.72

6,988.33

7,399.23

1,784.90

(ii)

392 742.12 26.96

- Amount payable under non-cancellable leases 8,065 4,800.13 5,848.96

8,457.81 5,542.24 5,875.92

- Other items

Commitments

- Custom duty saved against EPCG Licences, pending redemp�on

- Bank guarantees outstanding

- Demand raised for service tax against which appeals have been filed

- Demand raised for Income tax (assessment year 2004-05 to assessment year 2012-13)

- Claims against the Company not acknowledged as debt (to the extent ascertainable)

- Es�mated amount of contracts remaining to be executed on capital account (net of capital advances) and not provided for

- Demand raised by Punjab State Electricity Board for payment of penalty for usage of addi�onal power against sanc�oned load. Amount paid under protest Rs. 3.73 (31 March 2017: Rs. 3.73, 1 April 2016: Rs. 3.73)

(iii) During the year ended 31 March 2012, pursuant to the visit of the officers of Directorate general of Central excise intelligence (DGCEI) in the premises of the Company on 18 August 2011, the Company had reversed the input service tax credit of Rs. 170.00 in its service tax return which was availed by the Company in previous years. The above amount was reversed as per the opinion of the officials of DGCEI. The Company, on the basis of legal opinion obtained, is of the view that the Company is en�tled to this input service tax credit. Since, the amount was reversed under protest and without prejudice to the legal rights of the Company, the Company has shown the above amount of Rs. 170.00 reversed as claim receivable under the head "Long term loans and advances". During the year ended 31 March 2013, the Company had received a no�ce from DGCEI whereby, the Company had been called upon to show cause as to why service tax amoun�ng to Rs. 6.63 which had been short paid and CENVAT credit amoun�ng to Rs. 242.77 wrongly availed should not be demanded and recovered. The Company had filed the reply to the show cause no�ce with the Commissioner-Central Excise and Service Tax, Chandigarh. The authority has confirmed the demand except Rs. 6.63. Further , the authority has imposed a penalty of Rs. 242.77. Being aggrieved against the order of Commissioner- Central Excise and Service Tax, the Company has preferred appeal with CESTAT and the ma�er is sub-judice with CESTAT, Chandigarh. Due to the pending adjudica�on of the appeal, liability on this account has not been provided in the accounts.

(iv) In addi�on, the Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Company's management does not expect that these legal ac�ons, when ul�mately concluded and determined, will have a material and adverse effect on the Company's results of opera�ons or financial condi�on.

229


41 Employee Benefits

A. Assets and liabili�es rela�ng to employee benefits As at

31 March 2018

As at 1 April

2016

Liability for gratuity 61.55

48.46

154.44

28.52

48.50

36.98Liability for compensated absences 252.98

217.56 196.21 47.54 33.38 24.37

314.53

266.02 350.65 76.06 81.88 61.35

For details about the related employee benefit expenses, refer to note no. 30.

Non-Current Current

As at31 March

2017

As at31 March

2018

As at 1 April

2016

As at31 March

2017


B. Defined Benefit Plan

The employees’ gratuity fund scheme managed by Life Insurance Corpora�on of India is a defined benefit plan. The present value of obliga�on is determined based on actuarial valua�on using the Projected Unit Credit Method, which recognises each period of service as giving rise to addi�onal unit of employee benefit en�tlement and measures each unit separately to build up the final obliga�on. The Company made annual contribu�ons to the LIC of India of an amount advised by the LIC.

The above defined benefit plan exposes the Company to following risks:

Interest rate risk:

The defined benefit obliga�on calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obliga�on will tend to increase.

Salary infla�on risk:

Higher than expected increases in salary will increase the defined benefit obliga�on.

Demographic risk:

This is the risk of variability of results due to unsystema�c nature of decrements that include mortality, withdrawal, disability and re�rement. The effect of these decrements on the defined benefit obliga�on is not straight forward and depends upon the combina�on of salary increase, discount rate and ves�ng criteria. It is important not to overstate withdrawals because in the financial analysis the re�rement benefit of a short career employee typically costs less per year as compared to a long service employee.

The Company ac�vely monitors how the dura�on and the expected yield of the investments are matching the expected cash ou�lows arising from the employee benefit obliga�ons. The Company has not changed the processes used to manage its risks from previous periods. The funds are managed by specialised team of Life Insurance Corpora�on of India.(LIC)

(i) Funding

Gratuity is a funded benefit plan for qualifying employees. 100% of the plan assets are managed by LIC. The assets managed are highly liquid in nature and the Company does not expect any significant liquidity risks.

230



Par�culars As at 31 March

2018

(ii) Reconcilia�on of present value of defined benefit obliga�on

Present value of obliga�on at the beginning of the year 586.81 528.87 476.64 Current Service cost 68.03 41.59 38.05 Interest cost 46.94 50.34 46.91 Benefits paid (48.11) (60.64) (56.92) Actuarial (gains) losses recognised in other comprehensive income

- experience adjustments 78.06 26.64 24.19 Present value of obliga�on at the end of the year 731.73 586.80 528.87

(iii) Reconcilia�on of the present value of plan assetsPlan assets at the beginning of the year, at fair value 489.84 337.45 271.08 Return on plan assets recognised in other comprehensive income 31.32 - - Contribu�ons 118.12 26.67 23.08 Benefits paid (48.11) 186.81 101.21 Expenses deducted from the fund - (60.64) (56.92) Interest income 50.49 (0.45) (1.00) Plan assets at the end of the year, at fair value 641.66 489.84 337.45

(iv) Amount recognized in the balance sheetPresent value of the defined benefit obliga�ons at the end of the year 731.73 586.80 528.87 Fair value of plan assets at the end of the year (641.66) (489.84) (337.45) Net liability recognized in the balance sheet* 90.07 96.96 191.42 * Shown under the head "Provision for employee benefits"

(v) Plan assets

Plan assets comprise of the following:

Par�culars As at

31 March 2018

As at

31 March 2017Policy of insurance 641.66 489.84

641.66 489.84

(vi) Amount recognized in the Statement of Profit and Loss

Par�culars Year ended

31 March 2018

Year ended

31 March 2017

Current service cost 68.03 41.59 Interest cost (net) 11.74 50.34 Interest income (4.00) 0.45 Amount recognized in the Statement of profit and loss 75.78 92.37

(vii) Remeasurements recognised in other comprehensive income

Acturial gain/loss on the defined benefit obliga�on 78.06 26.64 Return on plan assets excluding interest income (42.61) - Amount recognized in other comprehensive income 35.45 26.64

As at 31 March

2017

As at 1 April

2016

231



(viii) Acturial assump�ons a) Economic assump�ons: The principal assump�ons are the discount rate and salary growth rate. The discount

rate is generally based upon the market yield available on the Government bonds at the accoun�ng date with a term that matches that of the liabili�es and the salary growth rate takes account of infla�on, seniority, promo�on and other relevant factors on long term basis.

The sensi�vity analyses above have been determined based on reasonably possible changes of the respec�ve assump�ons occurring at the end of the year and may not be representa�ve of the actual change. It is based on a change in the key assump�on while holding all other assump�ons constant. When calcula�ng the sensi�vity to the assump�on, the same method used to calculate the liability recognised in the Balance Sheet has been applied. The methods and types of assump�ons used in preparing the sensi�vity analysis did not change compared with the previous year.

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

Discount rate 8.00% 7% - 8% 8%Expected rate of return on plan assets 8.00% 7.55% - 8% 8% - 9%Salary increase 5.00% 5% 5%Expected average remaining working lives of employees (years) 7.50 7.55 7.67

b) Demographic assump�ons: As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

Re�rement age 58 years 58 years 58 yearsMortality Indian assured lives

mortality (2006-08)

Ul�mate

Indian assured lives

mortality (1994-96)

Ul�mate

Indian assured lives

mortality (1994-96)

Ul�mateA�ri�on rate Upto 30 years 3% 3% 3% 31 to 44 years 2% 2% 2% 44 and above 1% 1% 1%

(ix) Sensi�vity analysis on defined benefit obliga�on on account of change in significant assump�ons:

Par�culars

Increase Decrease Increase Decrease

Discount rate (0.5% movement) 21.91 (27.14) 30.96 (42.01) Future salary growth (0.5% movement) (53.08) 48.55 (69.30) 59.32


(x) Expected future benefit payments As at

31 March 2018

As at

31 March 2017

The expected maturity analysis of undiscounted defined benefit liability is as follows:

Within 1 year 106.02 5.83 1-2 years 127.80 6.00 2-5 years 366.50 18.73 Over 5 years 1,785.21 64.89

232


(xi) Weighted average dura�on and expected employers contribu�on for next year of the defined benefit plan

As at

31 March 2018

As at

31 March 2017

Weighted average dura�on (in years) 5.87 10.23

Expected Employers contribu�on for the next year 133.33 172.00


C. Defined Contribu�on Plan The Company makes contribu�on towards employees' provident fund, superannua�on fund and employees'

state insurance plan scheme. Under the schemes, the Company is required to contribute a specified percentage of payroll cost, as specified in the rules of the scheme, to these defined contribu�on schemes. The expense recognised towards contrbu�on of these plans is as follows:

D. Share based payments

(a) KDDL Employee Stock Op�on Plan - 2011 ("ESOP 2011")

The Company has established an Employee Stock Op�on Plan (‘ESOP’) in accordance with the Securi�es and Exchange Board of India (Employee Stock Op�on Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (‘Guidelines’) which has been approved by the Board of Directors and the shareholders. A compensa�on commi�ee comprising promoter execu�ve and independent non-execu�ve members of the Board of Directors administer the ESOP. All op�ons under the ESOP are exercisable for equity shares. The Company planned to grant upto 110,000 op�ons to eligible employees and directors of the Company and subsidiaries of the Company. The outstanding op�ons as at 31 March 2018 are 21,000 (31 March 2017: 21,000, 1 April 2016: 24,750).

Fi�y percent of the op�ons which have been granted under ESOP 2011 were vested on 1 April 2014 (‘first tranche’). These op�ons were exercised by the employees and accordingly 39,750 shares were issued during the previous years to the eligible employees. The balance op�ons shall vest on the date when the turnover (excluding excise duty thereon) of the Company would exceed Rs. 15,000.00 (‘second tranche’). The exercise period for the op�ons is within six months from the date of ves�ng of the op�ons. Each op�on is exercisable for one equity share of Rs 10 each fully paid up on payment of exercise price of share determined with respect to the date of grant.


Par�culars Year ended31 March 2018


Provident fund 160.05 135.99 Superannua�on fund 8.51 18.11 Employees' state insurance scheme 62.33 7.72 Pension fund 50.49 48.83

281.38 210.65

233



Number of op�ons Weighted Average

Exercise Price


Exercise PriceOutstanding at beginning of the year 21,000 120 24,750 120 Forfeited during the period - - (3,750) - Exercised during the period - - - - Outstanding at end of the year 21,000 120 21,000 120

(iii) The fair value of the op�ons has been determined under the Black-Scholes model and the inputs used in the measurement of the grant-date fair

Year ended

31 March 2018

Year ended

31 March 2017Fair value at grant date 61.05 61.05Share price at grant date 133.90 133.90Exercise Price 120.00 120.00Risk Free interest rate (in %) 8.50% 8.50%Expected life (in years) 88 88Expected vola�lity (in %)* 66.49% 66.49%Expected dividend Yield (in %) 1.58% 1.58%


(i) Reconcilia�on of outstanding share op�ons

The number and weighted-average exercise prices of share op�ons under the share op�on plans are as follows.

(ii) Expense recognised in statement of profit and loss

The expenses arising from share-based payment transac�on recognised in profit or loss as part of employee benefit expense / (income) for the year ended 31 March 2018 and 31 March 2017, were Rs. Nil and Rs. (2.76) respec�vely on account of expiry of share op�ons on resigna�on by certain employees.


(b) Ethos Employee Stock Op�on Plan - 2013

In the Extraordinary General Mee�ng held on 10 March 2014, the shareholders of the Subsidiary Company, Ethos Limited, appproved the issue of op�ons not exceeding 3,50,000 op�ons under the Scheme �tled "Ethos Employee Stock Op�on Plan – 2013". The ESOP allows the issue of op�ons to eligible employees of the Subsidiary Company. Each op�on comprises one underlying equity share.

As per the Scheme, the Compensa�on Commi�ee grants the op�ons to the employees deemed eligible. The exercise price of each op�on shall be equal to the “Market Price” as defined in the Scheme. The op�ons granted vest as follows. Op�ons may be exercised within 3 years of ves�ng.

1) 50% of the op�ons granted to the selected employee shall vest on 1 October 2017 in case there is con�nua�on of his service �ll the date of ves�ng.

2) 50% on the first day of the financial year subsequent to the achievement of billing of Rs. 50,000 in any financial year by the Company, subject to the con�nua�on of service �ll the date of ves�ng. However there shall remain a gap of minimum one year between the date of grant and the date of ves�ng under this clause. The compensa�on commi�ee shall declare such date as and when it is triggered.

234

The op�ons outstanding at 31 March 2018 have an exercise price of Rs. 120 (31 March 2017: Rs. 120, 1 April 2016: Rs. 120) per op�on.


The Company has in its Compensa�on Commi�ee mee�ng on 04.08.2014 granted outstanding 3,500 op�ons to employee of the holding Company. The above op�ons have been issued by the Compensa�on Commi�ee in accordance with the terms & condi�ons of the "Ethos Employee Stock Op�on Plan – 2013"


The op�ons outstanding at 31 March 2018 have an exercise price of Rs. 120 (31 March 2017: Rs. 120) per op�on and a weighted average remaining contractual life in the range of 2.16 to 2.56 years (31 March 2017: 3.16 years to 3.56 years).

(ii) Expense recognised in statement of profit and loss The expenses arising from share-based payment transac�on recognised in profit or loss as part of employee

benefit expense for the year ended 31 March 2018 and 31 March 2017, were Rs. 11.76 and Rs. 23.36 respec�vely on account of expiry of share op�ons on resigna�on by certain employees.


(i) Reconcilia�on of outstanding share op�onsThe number and weighted-average exercise prices of share op�ons under the share op�on plans are as follows.


Exercise Price


Exercise PriceOutstanding at beginning of the year 228,000 120 228,000 120 Lapsed during the period 35,000 - - - Exercised during the period 21,250 - - - Outstanding at end of the year 171,750 120 228,000 120


Exercise Price


Exercise PriceOutstanding at beginning of the year 3,500

120

3,500

120

Lapsed during the period -

-

-

- Exercised during the period -

-

-

-

Outstanding at end of the year 3,500

120

3,500

120



(iii) The fair value of the op�ons has been determined under the Black-Scholes model and the inputs used in the measurement of the grant-date fair Year ended

31 March 2018

Year ended

31 March 2017Fair value at grant date 35.54/56.08 35.54/56.08Share price at grant date 120 120Exercise Price 120 120

Risk Free interest rate (in %) 7.60%/7.60% 7.60%/7.60%Expected life (in years) 4.56/4.16 3.55/2.24/4.56/4.16Expected vola�lity (in %)* 40-60% 40-60%Expected dividend Yield (in %) 1.58% 1.58%


235


42 Related par�es:

(i) Associates

Kamla Tesio Dials Limited

(ii) Joint venture

Satva Jewellery and Design Limited (�ll 23 December 2016)*

(iii) Key managerial personnel (KMP) of the Company, their close family members and related en��es

(a) Names of KMP Names of their close family members** - Mr. R.K. Saboo (Chairman) Mrs. Usha Devi Saboo (spouse),

(Chairman �ll 30 November 2016) Mr. Yashovardhan Saboo (son)

Mrs. Asha Devi Saboo (brother's spouse)

- Mr. Yashovardhan Saboo Mr. R.K. Saboo (father),

(Chairman and Managing Director) Mrs. Anuradha Saboo (spouse) Mr. Pranav Shankar Saboo (Son),

Mrs. Malvika Singh (son's spouse)

- Mr. Sanjeev Kumar Masown Mrs. Neeraj Masown (wife),

(Chief Financial Officer and Whole Time Director) Mr Lal Chand Masown (father)

- Dinesh Agrawal (Chief Opera�ng Officer �ll 31 March) Mrs. Shashi Agrawal (spouse)

(b) Related en��es of KMP

- Vardhan Proper�es & Investments Limited

- Saboo Coa�ngs Private Limited

- VBL Innova�ons Private Limited

- Dream Digital Technology Limited

- KDDL Ethos Founda�on

(c) Independent Directors

- Mr. Anil Khanna

- Mr. Jagesh Khaitan

- Ms. Ranjana Agarwal

- Mr. Praveen Gupta

- Mr. Vishal Sa�nder Sood

- Mr. Jai Vardhan Saboo

- Mr. Sanjiv Sachar

*Satva Jewellery and Design Limited ('Satva') ceased to be joint venture of the Company and became wholly owned subsidiary of KDDL Limited pursuant to purchase of remaining shares of the other venturer in the joint venture vide agreement dated 23 December 2016. Accordingly, transac�ons during the year with Satva upto 23 December 2016 have been disclosed as transac�ons with joint venture and transac�ons incurred a�er 23 December 2016 have been disclosed as transac�on with joint venture

** With respect to the key managerial personnel, disclosure has been given for those rela�ves with whom the Company has made transac�ons during the year.


236



c) Related party transac�ons






Saboo Ventures LLP

Mr. R. K. Saboo


Mr. Pranav S Saboo




Mrs. Anuradha Saboo











5 Interest income





VBL Innova�ons Private Limited

Dream Digital Technology Private Limited

Saboo Ventures LLP

Saboo Housing Projects LLP

Mr. R. K. Saboo


Ms. Neeraj Masown

Mr. Lal Chand Masown



Mr. Anil Khanna

Mrs. Alka Khanna

Ms. Ranjana Agarwal

7 Deposits from shareholders accepted


Vardhan Proper�es & Investment Ltd.



Mrs. Alka Khanna

8 Reimbursement received for expenses



9 Loans taken

Vardhan Proper�es & Investment Limited



Saboo Ventures LLP

Saboo Housing Projects LLP

Associates Joint venture En��es over which

significant influence

is exercised

Key

management

personnel

Other related

par�es

- - 5.40 - -

- - 0.08 - -

- - 2.07 - -

- - - - 8.00

- - - 0.09 -

- - - - 0.33

6.00 - - - -

- - - 28.64 -

- - - - 15.00

- - - - -

- - - 124.01 -

- - - 64.25 -

- - - - -

- - - 20.00 -

- - - 5.09 -

- - - - -

- - - 18.00 -

- - - 3.80 -

- - 11.34 - -

- - - 2.32 -

- - 21.35 - -

- - 22.37 - -

- - 13.78 - -

- - 14.14 - -

- - 0.15 - -

- - - - 8.75

- - - 2.62 -

- - - - 2.01

- - - - 0.58

- - - - 1.14

- - - 2.49 -

- - - 5.12 -

- - - - 2.87

- - - 7.40 -

- - - 20.00 -

- - 17.00 - -

- - - - 4.23

- - - - 10.00

- - - - 1.00

- - 2.41 - -

0.02 - - - -

- - 510.00 - -

- - 50.00 - -

- - - 100.00 -

- - 400.00 - -

- - 7.00 - -

237


Year ended 31 March 2018 (Con�nued)



is exercised

Key

management

personnel

Other related

par�es

10 Expenses reimbursed

Dream Digital Technology Private Limited - - 3.93 - -

11 Rent received


Saboo Coa�ngs Private Limited - - 6.75 - -

12 Publicity & Adver�sement


13 Director fees


Mr. Anil Khanna - - - 6.15 -

Mr. N. Subramanian - - - 4.30 -

Mr. Rajat Kakar - - - 1.65 -

Mr. Sundeep Kumar - - - 1.10 -

Mrs. Neelima Tripathi - - - 1.10 -

Mr. Jai Vardhan Saboo - - - 0.15 -

Mr. Jagesh Khaitan - - - 1.40 -

Ms. Ranjana Agarwal - - - 0.95 -

Mr. Praveen Gupta - - - 0.80 -

Mr. Sanjiv Sachar - - - 0.85 -

14 Loan paid

Vardhan Proper�es & Investment Limited - - 600.00 - -


15 Sale of fixed assets

Saboo Ventures LLP - - 173.04 - -

16 Inter Corporate deposit repayment received

Vardhan Proper�es and Investment Limited - - 500.00 - -

17 Repayment of loans given by the Company



Dream Digital Technology Limited - - 21.00 - -

Mr. R. K. Saboo - - - - 18.00

19 Inter Corporate deposit received


20 Inter Corporate deposit given



KDDL Ethos Founda�on - - 15.50 - -

22 Dividend paid

Shri R.K. Saboo a/c Tara Chand Mahendra Kumar HUF - - 1.05 - -

Mr. R. K. Saboo - - - - 29.72


Mrs. Usha Devi Saboo - - - - 6.77

Mrs. Anuradha Saboo - - - - 5.76

Mr. Pranav S Saboo - - - - 3.22

Ms. Satvika Saboo - - - - 2.04

Vardhan Proper�es & Investment Ltd. - - 0.24 - -

Mrs. Asha Devi Saboo - - - - 0.46

Mr. Jagesh Khaitan - - - 0.01 -

Mr. Sanjiv Sachar - - - 0.02 -


Mr. Anil Khanna - - - 0.06 -

Others - - 0.97 - -



Mr. R. K. Saboo - - - - 18.00


238



239




is exercised

Key

management

personnel

Other related

par�es







Kamla Tesio Dials Limited 6.00 - - - -

Satva Jewellery & Design Limited - 2.25 - - -


Mr. R. K. Saboo - - - 4.00 2.00


-

-

20.84

-

Mrs. Anuradha Saboo -

-

-

-

3.00

Mrs. Usha Devi Saboo -

-

-

-

1.20

4 Salary of employees paid


-

1.10

-

-

5 Interest received

Satva Jewellery & Design Limited -

2.25

-

-

-



Mr. R. K. Saboo - - - - 6.05


Short-term employee benefits -

-

-

-

-

Mr. R. K. Saboo -

-

-

29.89

-


-

-

92.17

-


-

-

46.44

-

Post-employment benefits -

-

-

-

-


-

-

10.00

-


-

-

3.43

-

Long term employee benefits -

-

-

-

-


-

-

7.26

-


-

-

2.31

-



-

16.93

-

-


-

24.00

-

-

Dream Digital Technology Private Limited -

-

8.00

-

-

Mr. R. K. Saboo -

-

-

8.75

-


-

-

0.43

-

Ms. Neeraj Masown -

-

-

-

1.05

Mr. Lal Chand Masown -

-

-

-

0.51


-

-

-

1.25

9 Public deposits accepted

Ms. Neeraj Masown -

-

-

-

15.00



Vardhan Proper�es & Investment Ltd. - - 10.00 - -


Kamla Tesio Dials Limited - - - - -

VBL Innova�ons Private Limited 0.97 - - - -



11 Guarantee given

Mr. R. K. Saboo - - - 200.00 -


12 Loans taken

Swades Capital LLC - - 343.97 - -

Mr. Yashovardhan Saboo - - 65.81 - -

13 Repayment of Public deposits


14 Security deposit received - - - - -



KDDL Ethos Founda�on - - 18.00 - -

* This figure includes an amount of Rs. 279.70 which has been reimbursed by brands.




240

d) Amount outstanding

As at 31 March 2018



is exercised

Key

management

personnel

Other related

par�es

1 Loans and advances


-

-

36.24

-

2 Other receivables/advances


-

-

-

-


-

-

-

-

3 Payables


-

32.72

-

-

Kamla Tesio Dials Limited 5.96

-

-

-

-

4 Guarantees taken

Mr. R. K. Saboo -

-

-

-

6,505.11


-

-

11,505.54

-


-

-

-

334.31



-

5.00

-

-


-

2.00

-

-



-

-

-

10.00


-

-

24.20

-

Mr. Lal Chand Masown -

-

-

-

3.89

Ms. Neeraj Masown -

-

-

-

16.23

Mr. Anil Khanna -

-

-

40.00

-

Mrs. Alka Khanna -

-

-

-

21.00

Ms. Ranjana Agarwal -

-

-

50.00

-


-

35.00

-

-

7 Unsecured loans


-

100.00

-

-

Vardhan Proper�es & Investment Limited -

-

10.00

-

-

Mr. R. K. Saboo -

-

-

-

70.00


-

-

50.00

-

Saboo Ventures LLP -

-

400.00

-

-

Saboo Housing Projects LLP -

-

7.00

-

-

8 Inter Corporate deposit


As at 31 March 2017

1 Loans and advances


-

50.00

-

-


-

100.00

-

-


-

150.00

-

-


-

-

65.81

-

Mr. R. K. Saboo -

-

-

70.00

-



VBL Innova�ons Private Limited - - 0.19 - -



is exercised

Key

management

personnel

Other related

par�es

3 Payables


-

-

-

-


-

0.31

-

-


-

304.96

-

-


-

-

-

-


-

10.77

-

-

4 Guarantees taken

Mr. R. K. Saboo -

-

-

5,058.64

1,226.79


-

-

8,571.52

-


-

-

-

373.64



-

9.54

-

-



-

-

4.20

-


Ms. Neeraj Masown - - - - 15.00


7 Interest accrued but not due on borrowings



Ms. Neeraj Masown - - - - 1.49





is exercised

Key

management

personnel

Other related

par�es

241

As at 1 April 2016



is exercised

Key

management

personnel

Other related

par�es

1 Loans and advances given

Satva Jewellery and Design Limited -

51.97

-

-

-

Mr. Dinesh Agarwal -

-

-

8.00

-

2 Loans taken


-

50.00

-

-


-

100.00

-

-


-

150.00

-

-

Mr. R. K. Saboo -

-

-

70.00

-


Satva Jewellery and Design Limited -

3.92

-

-

-


-

0.72

-

-


-

27.58

-

-

4 Payables

Kamla Tesio Dials Limited 9.96

-

-

-

-



Vardhan Proper�es and Investment Limited - - 3.14 - - VBL Innova�ons Private Limited - - 5.39 - -

5 Guarantees taken

Mr. R. K. Saboo -

-

-

8,931.09

- Mr. Yashovardhan Saboo -

-

-

11,215.99

-


-

-

-

422.70

6 Public deposits outstanding


-

15.00

-

-


-

-

-

10.00

Mrs. Shashi Agrawal -

-

-

-

4.00

7 Interest on outstanding public deposit

Mrs. Shashi Agrawal -

-

-

-

1.40

e) Terms and condi�ons of transac�ons with related par�es

All transac�ons with related par�es are made on terms equivalent to those that prevail in arm’s length transac�ons and within the ordinary course of business.


242


43 Opera�ng segments

(a) Basis for segmenta�on

An opera�ng segment is a component of the Group that engages in business ac�vi�es from which it may earn revenues and incur expenses, including revenues and expenses that relate to transac�ons with any of the Group’s other components, and for which discrete financial informa�on is available. All opera�ng segments’ opera�ng results are reviewed regularly by the Group’s Chairman and Managing Director to make decisions about resources to be allocated to the segments and assess their performance.

The Group has three reportable segments, as described below, which are the Group's strategic business units. These business units offer different products and services, and are managed separately because they require different technology and marke�ng strategies. For each of the business units, the Group's Chairman and Managing Director reviews internal management reports on at least a quarterly basis.

The following summary describes the opera�ons in each of the Group's reportable segments:


243


Reportable segments Opera�ons

Precision and watch components Manufacturing and distribu�on of dials, watch hands and precision components

Watch and accessories

Others

Trading of watches and accessories

Manufacturing and distribu�on of packaging boxes

(b) Informa�on about reportable segments

Informa�on regarding the results of each reportable segment is included below. Performance is measured based on segment profit (before tax), as included in the internal management reports that are reviewed by the Group's Chairman and Managing Director. Segment profit is used to measure performance as management believes that such informa�on is the most relevant in evalua�ng the results of certain segments rela�ve to other en��es that operate within these industries. Inter-segment pricing is determined on an arm's length basis.


components

Watch

and watch accessories

Others Total

- External revenues 13,567.07 36,271.23 479.73 50,318.03 - Inter-segment revenue 1,418.30 1,019.32 - 2,437.62 Total segment revenue 14,985.37 37,290.55 479.73 52,755.65

Segment profit (loss) before income tax 2,559.19 1,112.25 (17.89) 3,653.54

Segment profit (loss) before income tax includes:- Interest revenue 69.23 109.60 1.76 180.59 - Interest expense 532.34 669.05 0.50 1,201.89 - Deprecia�on and amor�sa�on 727.76 407.36 21.53 1,156.65 - Share of profit (loss) of equity accounted investees 0.29 - (2.90) (2.61)

Segment assets 15,673.00 24,386.00 543.00 40,602.00

Segment assets include:- Investments accounted for using equity method 28.35 - - 28.35 - Capital expenditure during the year 611.16 1,138.02 - 1,749.19

Segment liabili�es 2,798.00 8,823.00 127.00 11,748.00


components

Watch

and watch accessories

Others Total

Segment revenue:- External revenues 12,590.76 32,775.95 476.88 45,843.59 - Inter-segment revenue 380.71 16.44 - 397.16 Total segment revenue 12,971.47 32,792.40 476.88 46,240.75

Segment profit (loss) before income tax 1,640.97 (417.60) 62.15 1,285.52

Segment profit (loss) before income tax includes:- Interest revenue 143.00 93.74 1.63 238.37 - Interest expense 633.03 682.34 10.48 1,325.85 - Deprecia�on and amor�sa�on 538.94 387.36 170.15 1,096.45 - Share of profit (loss) of equity accounted investees 0.91 - - 0.91

Segment assets 11,996.44 21,021.57 438.89 33,456.91 Segment assets include:- Investments accounted for using equity method 28.06 - - 28.06 - Capital expenditure during the year 905.34 204.76 - 1,110.10

Segment liabili�es 2,477.43 8,249.51 137.16 10,864.11

Reconcilia�ons of informa�on on reportable segments to Ind AS measures

Note As at

31 March 2018

As at

31 March 2017 i. RevenuesTotal revenue for reportable segments 52,755.65

46,240.75Elimina�on of inter-segment revenue (2,437.62)

(397.16)Total revenue 50,318.03

45,843.59

ii. Profit before taxTotal profit before tax for reportable segments 3,653.54

1,285.52Unallocated amounts:Corporate expenses (net of un-allocated revenue) (1,126.52)

(932.98)Consolidated profit before tax 2,527.02

352.54

iii. AssetsTotal assets for reportable segments 40,602.00 33,456.91Unallocated amounts 2,016.80 2,199.96Consolidated total assets 42,618.80

35,656.87

iv. Liabili�esTotal liabili�es for reportable segments 11,748.00

10,864.11Unallocated amounts 910.39

498.00Consolidated total liabili�es 12,658.39

11,362.11

v. Other material items

Reportable segment

total

Adjustments Consolidated total

Year ended 31 March 2018Interest revenue 178.83

-

178.83Interest expense 1,201.39

-

1,201.39Capital expenditure during the year 1,749.19

99.47

1,848.66Deprecia�on and amor�sa�on expense 1,156.65

56.60

1,213.25

Year ended 31 March 2017Interest revenue 236.74

-

236.74Interest expense 1,315.37

-

1,315.37Deprecia�on and amor�sa�on expense 1,096.45

64.21

1,160.66Capital expenditure during the year 1,110.10

133.86

1,243.96

Geographical informa�on

i. Revenues

Year ended

31 March 2018

Year ended

31 March 2017India 49,577.43 45,456.27Other countries 740.60 387.33Total 50,318.03 45,843.59

ii. Non-current assets

Year ended

31 March 2018

Year ended

31 March 2017India 13,176.89 10,716.42Other countries 574.55 574.55

Total 13,751.44 11,290.97



244

44 Opera�ng leases:

The Group’s significant opera�ng lease arrangements are in respect of premises (residen�al, offices, godown, machinery etc.). These leasing arrangements, which are cancellable, range between 11 months and 10 years generally and are usually renewable by mutual agreeable terms. The aggregate lease rentals payable are charged as expenses. Rental payments under such leases are Rs. 156.84 (previous year ended 31 March 2017: Rs. 227.10 ) has been included under rent expense in note 33.

The Subsidiary company, Ethos Limited, has opera�ng lease arrangements in respect of showrooms with an op�on of renewal at the end of the lease term and escala�on clauses in some of the cases. Rental payments under such leases (gross of reimbursements) (excluding taxes as applicable) Rs. 2553.75 (previous year ended 31 March 2017: Rs.2,548.0 ) [including Rs. 264.44 towards cancellable lease (previous year Rs. 447.71 lakhs)] has been included under rent expense in note 33.

Expected future minimum lease payments in respect of non-cancellable opera�ng leases are as follows:



As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

Payable in less than one year 2,009.74 1,493.32 1,609.91

Payable between one and five years 4,965.86 3,041.61 3,931.86

Payable a�er more than five years 1,089.76 265.20 307.18

45 The specified bank notes (SBN) as defined under the no�fica�on issued by the Ministry of Finance, Department of Economic dated 08 November, 2016 are no longer in existence. Hence the Company has not provided the corresponding disclosures as prescribed in Schedule III to the Companies Act, 2016. The disclosuree of SBN made in the financial statements for 31 March 2017 is as follows:

Par�culars SBNs* Other denomina�on

notes

Total

Closing cash in hand as on 8 November 2016 77.35 3.16 80.51

(+) Permi�ed receipts - 20.13 20.13

(-) Permi�ed payments - (17.00) (17.00)

(-) Amount deposited in Bank (77.35) - (77.35)

Closing cash in hand as on 30 December 2016 - 6.29 6.29

* For the purpose of this disclosure, the term 'Specified Bank Notes' shall have the same meaning provided in the no�fica�on of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407 (E) dated 8 November 2016.

46 The Company has established a comprehensive system of maintenance of informa�on and documents as required by the transfer pricing regula�on under sec�ons 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such informa�on and documenta�on to be contemporaneous in nature, the Company con�nuously updates its documenta�on for the interna�onal transac�ons entered into with the associated enterprises during the financial year and expects such records to be in existence latest by the due date as required under law. The management is of the opinion that its interna�onal transac�ons are at arm’s length so that the aforesaid legisla�on will not have any impact on the financial statements, par�cularly on the amount of income tax expense and that of provision for taxa�on.

(d) Major customer

For the year ended 31 March 2018 and 31 March 2017, there is no major customer with respect to consolidated revenue of the group.

245



47 Disclosures pursuant to Sec�on 186 of the Companies Act, 2013:

As at

31 March 2018

As at

31 March 2017

As at

1 April 2016

a) Loans and advancesLoan to subsidiary (erstwhile joint venture) : Satva Jewellery and Design Limited Balance as at the year end -

- 51.97Maximum amount outstanding at any �me during the year -

- 51.97(Satva Jewellery and Design Limited has u�lised the loan for mee�ng working capital requirements)

b) InvestmentInvestment in associate: Kamla Tesio Dials LimitedBalance as at the year end 28.35

28.06 27.14Maximum amount outstanding at any �me during the year 28.35

28.06 27.14

Investment in company: Karolview Developers Private Limited Balance as at the year end 38.13

50.00 50.00Maximum amount outstanding at any �me during the year 38.13 50.00 50.00

Investment in company: Shivalik Solid Waste Management LimitedBalance as at the year end 10.53 1.75 1.75Maximum amount outstanding at any �me during the year 10.53 1.75 1.75

48 In terms with the provisions of Ind AS – 110 “ Consolidated Financial Statements ”, the Parent Company has computed its share of losses a�er adjus�ng for the cumula�ve dividends on preference share capital issued by the subsidiary companies, though, dividends have not been declared by such subsidiaries. The details of the dividend adjusted during the year is as follows :

Amount of dividend Dividend per share Amount of dividend Dividend per share

12% cumula�ve compulsory conver�ble preference shares 600.66

-

98.85

13.20

12% cumula�ve op�onally conver�ble preference shares (45.15)

-

15.38

7.80

14% cumula�ve compulsory conver�ble preference shares 105.00 18.83

105.00

18.20

660.51

219.23

Arrears of fixed cumula�ve preference shareholders amounts to Rs. 342.79 (previous year: Rs. 866.65) has been included in minority interest.

Year ended 31 March 2018 Year ended 31 March 2017

As per our report of even date a�ached




246

Form No. MGT-11Proxy Form

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

CIN : L33302HP1981PLC008123Name of the Company : KDDL Limited

Registered office : Plot No 3, Sector-III, Parwanoo, Distt. Solan, (H. P) -173220

Name of the member (s) :

Registered address :

E-mail ID :

Folia No. / Client ID :

DP ID :

I/We, being the member (s) of....................shares of the above named company, hereby appoint

1. Name :

Address :

E-mail id :

Signature.......................or failing him

2. Name :

Address :

E-mail id :

Signature..........................or failing him

3. Name :

Address :

E-mail id :

Signature........................thas my / our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 38 Annual General Meeting of the Company, to be held

thon Saturday, 14 day of July, 2018 at 12:30 p.m. at and at any adjournment Hotel Timber Trail Resorts, Parwanoo, Distt. Solan, (H. P) -173220

thereof in respect of such resolutions as are indicated below :

Resolution No.

Signed this........................day of.......................2018

Signature of Shareholder

Signature of Proxy holder (s)Note : This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.

Affix

Revenue

Stamp

KDDL Limited

Ordinary Business Sr. No.

1

2

3

Special Business

Item

To receive, consider and adopt the Audited Financial Statements of the Company (Standalone as well as Consolidated) for the financial year ended 31�� March, 2018, the reports of the Board of Directors and Auditors thereon.

To consider and declare final dividend of Rs. 2.50 per equity share for the financial year 2017-18.

To re- appoint Mr. Sanjeev Kumar Masown, who retires by rotations at this Annual General Meeting and being eligible, offers himself for re-appointment.

Increase the aggregate limit for investment by the Foreign Portfolio Investors (FPIs) and Foreign Institutional Investors (FIIs) from 24 % to 49% of the paid up capital of the Company.

To increase the overall limit of investments / giving loans/guarantees / providing securities in terms of Sec 186 of the Companies Act, 2013

Further Issue of Equity Shares

Approval for change in Share Capital of material subsidiary, Ethos Limited.

Approval of Material Related Party Transactions

Re-appointment of Mr. Sanjeev Kumar Masown (DIN-03542390) as Whole Time Director-cum-Chief Financial Officer of the Company.

Further Issue of Equity Shares through Preferen�al Allotment

5

6

7

8

9

10

11

Authorisation for borrowings by way of unsecured fixed deposits from shareholders of the Company.4

247

ATTENDANCE SLIPATTENDANCE SLIP



Phone: 0172-2548223/24 & 27, Fax: 0172-2548302

thI / we hereby record my / our presence at the 38 Annual General Meeting of the Company to be held on Saturday, ththe 14 day of July, 2018 at 12:30 p.m. at at Hotel Timber Trail Resorts, Parwanoo, Distt. Solan, (H.P.) - 173220.

248

249

1



Phone: 0172-2548223/24 & 27, Fax: 0172-2548302THFIRST ADDENDUM TO NOTICE OF 38 ANNUAL GENERAL MEETING OF KDDL LIMITED

th In con�nua�on to the No�ce of 38 Annual General Mee�ng [“AGM”] of the members of KDDL Limited [“the thCompany”] dated 14 May, 2018, Hotel Timber thscheduled to be held on Saturday, 14 July, 2018 at 12:30 p.m. at

Trail Resorts, Parwanoo, Dis�. Solan, (H.P.) - 173220, which is being sent herewith to members of the Company, NOTICE is hereby given that the following addi�onal Special Business will also be transacted at the AGM and this No�ce be read in con�nua�on to the aforesaid no�ce.

SPECIAL BUSINESS:

5. Increase the aggregate limit for investment by the Foreign Por�olio Investors (FPIs) and Foreign Ins�tu�onal Investors (FIIs) from 24 % to 49% of the paid up capital of the Company.

To consider and if thought fit, to pass with or without modifica�on[s], the following resolu�on as a Special Resolu�on:

“RESOLVED THAT pursuant to the provisions of Foreign Exchange Management Act, 1999, and the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regula�ons, 2017 and all other applicable rules & regula�ons, guidelines and laws (including any statutory modifica�ons or re-enactment thereof for the �me being in force) and subject to all applicable approvals, permissions and sanc�ons and subject to such condi�ons as may be prescribed by any of the concerned authori�es while gran�ng such approvals, permissions, sanc�ons which may be agreed to by the Board of Directors of the Company (hereina�er referred to as the “Board”, which term shall include a duly authorised commi�ee of Directors for the �me being exercising the powers conferred by the Board of Directors), consent of the shareholders of the Company be and is hereby accorded to permit Foreign Por�olio Investors (FPIs), Foreign Ins�tu�onal Investors (the “FIIs”) registered with the SEBI to acquire and hold on their own account and on behalf of each of their SEBI approved sub-accounts by whatever name called, to make investment in any manner in the equity shares of the Company upto an aggregate limit of 49% (Forty Nine percent) of the paid-up equity share capital of the Company, provided, however, that the shareholding of each FIIs/FPIs in its own account and on behalf of each of their SEBI approved sub-accounts in the Company shall not exceed such limits as are applicable or may be prescribed, from �me to �me, under applicable Acts, Laws, Rules and Regula�ons (including any statutory modifica�ons or re-enactment thereof for the �me being in force).

“FURTHER RESOLVED that the Board of Directors (which shall include any Commi�ee which the Board may cons�tute, or any Director/Officer authorised by the Board for this purpose) be and it is hereby authorised to se�le all ma�ers arising out of and incidental to the abovemen�oned increase in FIIs/FPIs limits and further take all ac�ons as it may, in its absolute discre�on, deem necessary to give effect to this Resolu�on.”

6. To increase the overall limit of investments / giving loans/guarantees / providing securi�es in terms of Sec 186 of the Companies Act, 2013.


“RESOLVED THAT in supersession to the earlier resolu�ons passed in this behalf and pursuant to the provisions of Sec�on 186 of the Companies Act, 2013 and any other applicable provisions of the Companies Act, 2013 and rules made there under (including any statutory modifica�on thereof for the �me being in force and as may be enacted from �me to �me) the consent of the shareholders of the Company be and is hereby accorded to the Board (a) to give any loan to any body corporate(s) / person (s); (b) to give any guarantee or to provide any security in connec�on with a loan given to any person or other body corporates including any subsidiary; (c) to

KDDL Limited

acquire by way of subscrip�on, purchase or otherwise, the securi�es of any other body corporate including any subsidiary or joint venture en�ty from �me to �me in one or more tranches as the Board of Directors in their absolute discre�on deem beneficial and in the interest of the Company to the extent permi�ed under applicable laws, upto an aggregate amount not exceeding Rs. 300 Crores (Three Hundred Crores Only) excluding Rs. 200 Crores (Two Hundred Crores Only) already approved by way of Special Regula�ons through postal ballot on 16�� April, 2016, outstanding at any �me notwithstanding that such investments made or to be made, outstanding loans given or to be given and guarantees and security provided or to be provided are in excess of the limits prescribed under Sec�on 186 of the Companies Act, 2013.

RESOLVED FURTHER THAT for the purpose of giving effect to the above, Board of Directors of the Company and/or any person authorized by the Board from �me to �me be and is hereby empowered and authorised to take such steps as may be necessary for obtaining approvals, statutory or otherwise, in rela�on to the above and to se�le all ma�ers arising out of and incidental thereto and to sign and to execute deeds, applica�ons, documents and wri�ngs that may be required, on behalf of the Company and generally to do all such acts, deeds, ma�ers and things as may be necessary, proper, expedient or incidental for giving effect to this resolu�on.”

7. Further Issue of Equity Shares


"RESOLVED THAT in accordance with:

a) the provisions of Sec�ons 42, 62 and other relevant provisions of the Companies Act, 2013 read with the Companies (Prospectus and Allotment of Securi�es) Rules, 2014 and the Companies (Share Capital and Debentures) Rules, 2014 (including any statutory modifica�on(s) or re-enactment(s) thereof for the �me being in force) (“the Act”) and

b) Lis�ng Agreement entered into by the Company with the Stock Exchanges where the equity shares of the Company are listed and traded, read with the provisions of the Securi�es & Exchange Board of India( Lis�ng obliga�ons and Disclosure Requirement) Regula�ons, 2015(including any statutory modifica�on(s) or re-enactment(s) thereof for the �me being in force) ) (“Lis�ng Regula�ons”) and

c) the provisions of the Securi�es & Exchange Board of India (Issue of Capital and Disclosure Requirements) Regula�ons, 2009 (“ICDR Regula�ons") (including any statutory modifica�on(s) or re-enactment(s) thereof for the �me being in force) and

d) the provisions of Foreign Exchange Management Act, 1999 (including any statutory modifica�on(s) or re-enactment(s) thereof for the �me being in force) (“FEMA”) and regula�ons made thereunder including the Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) Regula�ons, 2017 (including any statutory modifica�on(s) or re-enactment(s) thereof for the �me being in force) and

e) the relevant provisions of the Memorandum and Ar�cles of Associa�on of the Company and

f) all other applicable rules, regula�ons, statutes, no�fica�ons, circulars, clarifica�ons and/or guidelines, as may be applicable, as amended from �me to �me by the Government of India (“GOI”), the Ministry of Corporate Affairs (“MCA”), the Securi�es Exchange Board of India (“SEBI”), BSE Limited and Na�onal Stock Exchange Board of India Limited ( collec�vely referred to as “Stock Exchanges”), the Reserve Bank of India (“RBI”) and/or any other regulatory body or authority as may be applicable and

g) subject to all requisite approvals, consents, permissions or sanc�ons (if any), as may be required from any regulatory/statutory authori�es including GOI, MCA, SEBI, RBI and Stock Exchanges or other competent authority or any bank or financial ins�tu�on ( hereina�er singly or collec�vely referred to as the “Appropriate Authori�es”) as may be required and

h) subject to such terms, condi�ons, s�pula�ons and modifica�ons as may be prescribed, imposed or suggested by any of the Appropriate Authori�es while gran�ng any such approvals, permissions and

2

KDDL Limited

sanc�ons, which may be agreed to by the Board of Directors of the Company (hereina�er referred to as the “Board” which term shall be deemed to include any commi�ee cons�tuted or to be cons�tuted by the board to exercise its powers including the powers conferred by this resolu�on and

i) subject to such condi�ons and modifica�on as may be considered appropriate by the Board, consent and approval of the Company be and is hereby accorded to create, offer, issue and allot in one or more tranches, such number of securi�es for an aggregate amount upto Rs. 30,00,00,000 (Thirty Crores only) by way of Qualified Ins�tu�onal Placement (QIP) and/or Preferen�al Allotment and/or through any other permissible mode and/or combina�on thereof in accordance with the provisions of ICDR Regula�ons or other applicable laws, to be subscribed to in Indian and/or any foreign currency(ies) by all eligible investors, including, resident or non-resident/foreign investors (whether ins�tu�ons and/or incorporated bodies and/or trusts or otherwise)/foreign por�olio investors/mutual funds/pension funds/venture capital funds/ banks/ alternate investment funds/ Indian and/or mul�lateral financial ins�tu�ons, insurance companies and any other category of persons or en��es who are authorized to invest in Securi�es of the Company as per extant regula�ons/ guidelines or any combina�on of the above as may be deemed appropriate by the Board in its absolute discre�on and whether or not such investors are members of the Company (collec�vely called the “Investors”), to all or any of them, jointly and/or severally through an offer/placement document and/or other le�er or circular and/or on private placement basis, on such terms and condi�ons. considering the prevailing market condi�ons and other relevant factors wherever necessary, including securi�es premium, or its equivalent amount in such foreign currencies as may be necessary, in one or more tranche or tranches, at such price or prices as may be computed in terms of applicable regula�ons at the Board's absolute discre�on including the discre�on to determine the categories of Investors to whom the offer, issue and allotment of Securi�es shall be made to the exclusion of other category of investors at the �me of such offer, issue and allotment, considering the prevailing market condi�ons and other relevant factors as the Board may in its absolute discre�on may deem fit and appropriate.”

RESOLVED FURTHER THAT in the event the Equity Shares are issued in the course of QIP under Chapter VIII of ICDR Regula�ons, the relevant date for the purpose of the pricing of the Equity Shares shall be the mee�ng in which the Board decides to open the issue and the pricing shall be determined in compliance with principles and provisions set out in the regula�on 85 of Chapter VIII of the ICDR Regula�ons and the Board may offer a discount of not more than 5% (five per cent) on the price calculated for the QIP or such other discount as may be permi�ed under said ICDR Regula�ons.

RESOLVED FURTHER THAT the allotment of the Equity Shares shall be made in dematerialized form.

RESOLVED FURTHER THAT the securi�es to be created, issued, allo�ed and offered in terms of this resolu�on shall be subject to the provisions of the Memorandum and Ar�cles of Associa�on of the Company and shall be locked in as per the provisions of ICDR Regula�ons.

RESOLVED FURTHER THAT the Equity Shares so issued shall in all respects rank pari passu with the exis�ng Equity Shares of the Company and shall be listed with the Stock Exchanges, where the Company's exis�ng Equity Shares are listed.

RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate (to the extent permi�ed by law) all or any of the powers herein conferred to any Commi�ee formed for the purpose or to an officer of the Company.

RESOLVED FURTHER THAT the Board be and is hereby authorised to appoint merchant bankers, underwriters, depositories, custodians, registrars, trustees, bankers, lawyers, advisors and all such agencies as may be involved or concerned in the issue and to remunerate them by way of commission, brokerage, fees or the like (including reimbursement of their actual expenses) and also to enter into and execute all such arrangements, contracts / agreements, memorandum, documents, etc., with such agencies, to seek the lis�ng of Securi�es on one or more recognized stock exchange(s), to affix common seal of the Company on any arrangements, contracts / agreements, memorandum, documents and to decide any other related issue.

RESOLVED FURTHER THAT for the purpose of giving effect to any offer, issue or allotment of Securi�es, the Board be and is hereby authorised on behalf of the Company to do all such acts, deeds, ma�ers and things as it may, in

KDDL Limited

3

absolute discre�on, deem necessary or desirable for such purpose, including without limita�on, the determina�on of the terms and �ming of the issue of Securi�es including for each tranche of such issue of Securi�es, finaliza�on and approval of the offer document(s), private placement offer le�er, determining the form, propor�on and manner of the issue, including the class of investors to whom the Securi�es are to be allo�ed, number of Securi�es to be allo�ed, issue price, premium / discount amount on issue / conversion / exercise / redemp�on, rate of interest, redemp�on period, fixing record date, lis�ngs on one or more stock exchanges in India or abroad, entering into arrangements for managing, underwri�ng, marke�ng, lis�ng and trading, to issue placement documents and to sign all deeds, documents and wri�ngs and to pay any fees, commissions, remunera�on, to make such other applica�ons to concerned statutory or regulatory authori�es as may be required in rela�on to the issue of Securi�es and to agree to such condi�ons or modifica�ons that may be imposed by any relevant authority or that may otherwise be deemed fit or proper by the Board and to do all such acts, deeds, ma�ers and things in connec�on therewith and incidental thereto as the Board in its absolute discre�on deems fit and to se�le any ques�ons, difficul�es or doubts that may arise in rela�on to any of the aforesaid or otherwise in rela�on to the issue of Securi�es and for other related ma�ers without being required to seek any further consent or approval of the members or otherwise to the end and intent that they shall be deemed to have given their approval thereto expressly by the authority of this resolu�on.”

8. Approval for change in Share Capital of Material Subsidiary, Ethos Limited.


“RESOLVED THAT pursuant to the provisions of ar�cle number 81-A(3) and other applicable provisions of the Ar�cles of Associa�on of the Company (AOA) and other applicable laws or subject to such other consents, approvals from any other authority as may be required, consent of the shareholders of the Company be and is hereby accorded to the proposed change in the Equity Paid up Share Capital of the material subsidiary Company from Rs. 15,90,85,640 (Fi�een Crores Ninety Lakhs Eighty Five Thousands Six Hundred Forty only) divided into 1,59,08,564 ( One Crore Fi�y Nine Lakhs Eight Thousands Five Hundred Sixty Four only) Equity Shares of Rs 10 (Ten) each to Rs. 17,62,08,910 (Seventeen Crores Sixty Two Lakhs Eight Thousand Nine Hundred Ten only) divided into 1,76,20,891 (One Crore Seventy Six Lakhs Twenty Thousands Eight Hundred Ninety One only) Equity Shares of Rs 10 (Ten) each.

FURTHER RESOLVED that the Board of Directors (which shall include any Commi�ee which the Board may cons�tute, or any Director/Officer authorised by the Board for this purpose) be and is hereby authorised to se�le all ma�ers arising out of and incidental to the change in the share capital of material subsidiary and to do all acts, deeds and things as may deem necessary to give effect to this Resolu�on.”

9. Approval of Material Related Party Transac�ons


"RESOLVED THAT pursuant to provisions of regula�on 23(4) of the Securi�es and Exchange Board of India (Lis�ng Obliga�ons and Disclosure Requirements) Regula�ons, 2015 and Sec�on 188 of the Companies Act, 2013 read with the Companies (Mee�ng of Board and its Powers) Rules, 2014 as applicable thereunder (including any statutory modifica�on(s) or re-enactment(s) thereof for the �me being in force), and any amendments thereto and subject to such other approvals and sanc�ons of any authori�es as may be necessary, the consent of the shareholders of the Company be and is hereby accorded to the Board of Directors (which term shall include any Commi�ee cons�tuted by the Board or any person(s) authorized by the Board to exercise the powers conferred), to enter into contract(s)/arrangement(s)/transac�on(s) including investment in the shares (equity/preference), with Ethos Limited, a material subsidiary within the meaning of the aforesaid clause, and a related party, on such terms and condi�ons as may be mutually agreed upon, the value of which either singly or all taken together may exceed ten per cent of the annual consolidated turnover of the Company as per audited financial statements of the financial year 2017-18;

KDDL Limited

4

Descrip�on of Contract(s)/Arrangement(s) /Transac�on(s)

Period of Contract(s)/Arrangement(s) /

Transac�on(s)

Total Cumula�veContract(s)/Arrangement(s)

/Transac�on(s) value with Related Party

Sale/ Purchase of Goods

and Services,

Reimbursement of

Expenses, Rent, Salary

payment, providing

corporate guarantees

and investment in equity

or preference share

capital ( in the ordinary

course of business and

on arm's length price)

st1 April, 2018 to st31 March, 2019

Rs. 100 Crores

RESOLVED FURTHER THAT the Board of Directors of the Company, be and is hereby authorised to sign and execute necessary documents and papers on an ongoing basis and to do all such acts, deeds and things as may be necessary and expedient to give effect to the above resolu�on in this regard.”

10. Re-appointment of Mr. Sanjeev Kumar Masown (DIN-03542390) as Whole �me Director-cum-Chief Financial Officer of the Company.

To consider and if thought fit, to pass with or without modifica�on(s), the following resolu�on as a Special Resolu�on:

"RESOLVED THAT pursuant to the provisions of Sec�ons 149, 161, 196, 197 and 203 read with schedule V and other applicable provisions of the Companies Act, 2013 and the rules made there under (including any statutory medica�on(s) or re-enactment thereof for the �me being in force), and all other applicable laws, if any, and subject to the Ar�cles of Associa�on of the Company, consents and permission as may be necessary, consent of the shareholders of the Company be and is hereby accorded for the appointment of Mr. Sanjeev Kumar Masown holding (DIN-03542390) as Whole �me Director (Key Managerial Personnel with func�onal designa�on as Chief

stFinancial Officer) of the Company for a period of 3 (three) years w.e.f. 31 May, 2018, upon the terms and condi�ons and remunera�on as set out in the explanatory statement, which may be altered, modified ̀ or varied by the Board of Directors of the Company".

RESOLVED FURTHER THAT in the event of loss or inadequacy of profits in any financial year during the currency of tenure of the appointment, the Whole Time Director shall be paid salary, perquisites and other allowances as set out in Explanatory Statement, as the minimum remunera�on, subject to ceiling as specified in Schedule V of the Companies Act, 2013 from �me to �me and subject to the approval of the Central Government, if so required, in accordance with the provisions of the Companies Act, 2013.

RESOLVED FURTHER THAT any Director or the Company Secretary of the Company be and are hereby authorised to take such steps and do all other acts, deeds and things as may be necessary or desirable to give effect to this resolu�on.”

NOTES:

1. An Explanatory Statement pursuant to Sec�on 102(1) of the Companies Act, 2013 rela�ng to the Special Business as proposed above to be transacted at the 38�� Annual General Mee�ng (AGM) is annexed hereto.

KDDL Limited

5

2. The Board of Directors of the Company (“the Board”) at its mee�ng held on 14�� May, 2018 approved the No�ce convening the 38�� AGM of the Company scheduled to be held on Saturday, 14�� July, 2018. Subsequently, the Board at its mee�ng held on 11�� June, 2018 considered and approved this Addendum containing the Special Business to be approved by the Shareholders of the Company at 38�� AGM of the Company.

3. Brief profile and other required informa�on about the Director proposed to be re-appointed, as required under Regula�on 36 of the Securi�es and Exchange Board of India (Lis�ng Obliga�ons and Disclosure Requirements) Regula�ons, 2015 is a�ached herewith.

4. Relevant documents referred to in this Addendum to No�ce of 38�� AGM shall be open for inspec�on by the Members at the Registered Office of the Company during normal business hours (11:00 a.m to 2:00 p.m.) on all working days up to and including the date of the Annual General Mee�ng.

5. All the processes, notes and instruc�ons rela�ng to e-vo�ng set out for and applicable to the ensuing AGM shall muta�s-mutandis apply to the e-vo�ng for the Resolu�ons proposed in this Addendum to the No�ce of 38�� AGM. Furthermore, the Scru�nizer appointed for the ensuing 38�� AGM will act as Scru�nizer for the Resolu�ons proposed in this Addendum.

EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

ITEM NO. 5

In terms of Foreign Exchange Management Act, 1999 and the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regula�ons, 2017, the Foreign Por�olio Investors (“FPIs”), the Foreign Ins�tu�onal Investors (FIIs) /SEBI approved sub-accounts of FIIs) can, in aggregate, can hold upto 24% of paid-up equity capital of the Company. In accordance with RBI Regula�ons, the limit of 24% can be increased upto the sectoral cap/statutory ceiling, as applicable, by the Company with the approval of the Board of Directors and the Members through a Resolu�on and Special Resolu�on respec�vely.

To provide more space for the FPIs, FIIs and Foreign Body Corporates to invest in the equity of the Company, it is proposed to enhance the investment limit for the abovemen�oned persons from 24 % to 49% of the paid-up equity share capital of the Company. The Board at its mee�ng held on 11�� June, 2018 has recommended to increase the limit as above.

Accordingly, consent of the Members is sought for passing a Special Resolu�on as set out at Item no. 5 of the no�ce for increase in the limit of shareholding by FPIs, FIIs and Foreign Body Corporates from 24% to 49% of the paid up capital of the Company.

None of the Directors of the Company or Key Managerial Personnel or their rela�ves are in any way, concerned or interested in the resolu�on.

The Board recommends the Special Resolu�on set out at Item No. 5 of the No�ce for approval by the Members.

ITEM NO. 6

In order to make op�mum use of funds available with the Company and also to achieve long term strategic and business objec�ves, the Board of Directors of the Company proposes to make use of the same by making investment in other bodies corporate or gran�ng loans, giving guarantee or providing security to other persons or other body corporate or subsidiary companies as and when required.

In accordance with the provisions of sec�on 186(3) of the Companies Act, 2013 and rules made there under, the Company needs to obtain prior approval of the Members by way of Special Resolu�on passed at the General Mee�ng in case the amount of investment, loan, guarantee or security proposed to be made is more than the higher of sixty percent of the paid up share capital, free reserves and securi�es premium account or one hundred percent of free reserves and securi�es premium account.

Accordingly, consent of the Members is sought for passing the Special Resolu�on as set out at Item no. 6 of the No�ce for increase in the overall limit of investments / giving loans/guarantees / providing securi�es in terms of

KDDL Limited

6

Sec 186 of the Companies Act, 2013 not exceeding Rs. 300 Crores (Three Hundred Crores Only) excluding Rs. 200 Crores (Two Hundred Crores Only) already approved by way of Special Regula�ons through postal ballot on 16�� April, 2016,



ITEM NO. 7

It is proposed to raise the funds to meet the objec�ve of long term capital resources, expansion plans, addi�onal working capital requirements, to make any further investments in its subsidiaries or other general corporate purposes, upto Rs. 30,00,00,000 (Thirty Crores only ) by way of Qualified Ins�tu�onal Placement (QIP) and/or Preferen�al Allotment and/or through any other permissible mode and/or combina�on thereof in accordance with the provisions of the Securi�es and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regula�ons, 2009 and other applicable laws.

The proposed Special Resolu�on is an enabling resolu�on and therefore, the proposal seeks to confer powers to the Board (including a commi�ee thereof) the absolute discre�on to determine the terms of the aforemen�oned issuance of Securi�es, including the exact price, propor�on and �ming of such issuance, based on an analysis of the specific requirements. The detailed terms and condi�ons of such issuance will be determined by the Board or a commi�ee thereof, considering prevailing market condi�ons, prac�ces and in accordance with the applicable provisions of law. Accordingly, the Board (including a commi�ee thereof) may, in its discre�on, adopt any one or more of the mechanisms prescribed above to meet its objec�ves as stated in the aforesaid paragraphs without the need for fresh approval from the members of the Company.

In accordance with the provisions of Sec�ons 42, 62 and other applicable provisions, if any, of the Companies Act, 2013 read with the Rules made thereunder (including any statutory modifica�on(s) or re-enactment(s) thereof for the �me being in force) (“the Act”), if any, (including any amendments, statutory modifica�on(s) and/ or re-enactment thereof for the �me being in force), the Securi�es and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regula�ons, 2009 (the “ICDR Regula�ons”) and the Securi�es and Exchange Board of India (Lis�ng Obliga�ons and Disclosure Requirements) Regula�ons, 2015 (the “Lis�ng Regula�ons”), approval of members is required way of Special Resolu�on for making any further issue of Equity Shares or Securi�es.

Accordingly, consent of the Members is sought for passing the Special Resolu�on as set out at Item no. 7 of the No�ce for further issue of securi�es as men�oned above.



ITEM NO. 8

In accordance with the provisions of clause 81-A(3)(A) of the Ar�cles of Associa�on of the Company, any change in the share capital of the material subsidiary, computed on a fully diluted and converted basis, including any change through the issuance of equity share or securi�es that may be conver�ble into equity shares of such material subsidiary shall not be undertaken without the prior approval of the members by way of Special Resolu�on. Since, Ethos Limited which is a material subsidiary of the Company , and also a related party as per Companies Act, 2013, plans to further create 17,12,327 Equity Shares of Rs. 10 each by way of Preferen�al Allotment and Increase its' paid up equity share capital from Rs. 15,90,85,640 (Fi�een Crores Ninety Lakhs Eighty Five Thousands Six Hundred Forty only) divided into 1,59,08,564 ( One Crore Fi�y Nine Lakhs Eight Thousands Five Hundred Sixty Four only) Equity Shares of Rs 10 (Ten) each to Rs. 17,62,08,910 (Seventeen Crores Sixty Two Lakhs Eight Thousand Nine Hundred Ten only) divided into 1,76,20,891 (One Crore Seventy Six Lakhs Twenty Thousands Eight Hundred Ninety One only) Equity Shares of Rs 10 (Ten) each.

Accordingly, consent of the Members is sought for passing a Special Resolu�on as set out at Item no. 8 of the No�ce for change in the share capital of Ethos Limited, a material subsidiary of the Company.

KDDL Limited

7

None of the Directors of the Company or Key Managerial Personnel or their rela�ves except Mr. Yashovardhan Saboo and Mr. Anil Khanna are concerned and interested in the Special Resolu�on as set out at Item no. 8 of the No�ce.

The Board recommends the Special Resolu�on set out at Item No. 8 of the No�ce for approval by the Shareholders.

ITEM NO. 9

Pursuant to Sec�on 188 of the Act, read with Rule 15 of the Companies (Mee�ngs of Board and its Powers) Rules, 2014 and regula�on 23 (4) of the Lis�ng Regula�ons, the Company is required to obtain prior approval of the members by resolu�on in case, Related Party Transac�ons exceed such sum as is specified in the rules/regula�ons.

However, pursuant to regula�on 23(4) of Lis�ng Regula�ons, approval of the shareholders through Resolu�on is required for all 'material' related party transac�ons (RPT) even if they are entered into in the ordinary course of business on an arm's length basis. For this purpose, a RPT will be considered 'material' if the transac�on / transac�ons to be entered into individually or taken together with previous transac�ons during a financial year exceeds 10% of the annual consolidated turnover of the Company as per the last audited financial statements of the Company.

The following transac�ons (in the ordinary course of business and on arm's length price) to be entered into by the Company, together with transac�ons already entered into by the Company with Ethos Limited, a material subsidiary and a related party, during the financial year 2018-19 are es�mated to exceed 10% of the annual consolidated turnover of the Company as per the Audited Financial statements of the Company for the year

stended 31 March, 2018:-

The other related informa�on as envisaged under Companies (Mee�ng of Board and its Powers) Rules, 2014 and any amendments thereto are given herein below:

Hence, owing to the materiality of the contract(s)/ arrangement(s)/transac�on(s) with Ethos Limited, a material subsidiary, the approval of the members is being sought through this resolu�on.

KDDL Limited

8

1. Name of the related party and nature of rela�onship;

2. Name of the director or key managerial personnel interested in any contract or arrangement, if any;

3. Nature of rela�onship;

4. The nature, dura�on of the contract and par�culars of the contract or arrangement, material terms of contract or value;

5. Any advance paid or received for the contract or arrangement, if any;

6. Any other informa�on relevant or important for the members to take a decision on the proposed resolu�on;

Ethos Limited, a material subsidiary


Mr. Anil Khanna

Directors in both Companies.

Nature : Sale/ Purchase of Goods and Services, Reimbursement of Expenses, Rent, Salary payment, providing corporate guarantees and investment in equity or preference share capital

Dura�on : For financial year 2018-19

Value : Rs. 100 Crores

Material Terms : As agreed between par�es from �me to �me

NA

NA

None of the Directors of the Company or Key Managerial Personnel or their rela�ves except Mr. Yashovardhan Saboo and Mr. Anil Khanna are concerned and interested in the Resolu�on as set out at Item no. 9 of the No�ce.


ITEM NO. 10th th The Shareholders at their 36 Annual General Mee�ng of KDDL Limited held on Friday, 12 day of August, 2016

appointed Mr. Sanjeev Kumar Masown as Whole �me Director with func�onal designa�on of Chief Financial thOfficer of the Company for a period of 3 (three) years w.e.f 30 May, 2016.

He is liable to re�re by rota�on at this AGM and being eligible, has offered himself for reappointment. Pursuant to the recommenda�on of Nomina�on and Remunera�on Commi�ee Mee�ng, the Board of Directors, at its

thmee�ng held on 11 June, 2018, subject to the approval of Shareholders, has approved the re-appointment and revised the remunera�on of Mr. Sanjeev Kumar Masown as Whole �me Director (Key Managerial Personnel with

stfunc�onal designa�on as Chief Financial Officer) of the Company for a period of 3 (three) years w.e.f. 31 May, 2018. He is not disqualified from being appointed as a Director in terms of Sec�on 164 of the Companies Act, 2013 and has given his consent to act as Director in terms of sec�on 152 of the Act. Brief resume of Mr. Sanjeev Kumar Masown, nature of his exper�se in specific func�onal area and names of companies in which he hold directorships and memberships/ chairmanships of Board Commi�ees, are provided in this No�ce.

The details of remunera�on are given below:

KDDL Limited

9

Following Perquisites / allowances shall not be considered in the computa�on of ceilings of the remunera�on specified in Sec�on IV of Part II of Schedule V of the Companies Act, 2013.1. All these benefits are subject to the rules of the company. a. Contribu�ons to Provident Fund, superannua�on or annuity fund which are not taxable; b. Gratuity payable up to the limit payable under the Payment of Gratuity Act, 1972; c. Earned leave encashment. d. Children educa�on allowance up to Rs. 12000 p.m. per child for two children. e. Leave Travel Concession for self and family subject to a ceiling of one month's salary or three months' salary over a period of three years.2.Provision of car with driver for use on Company's business and telephone(s) or mobile(s) at residence will not be considered as perquisites.

Par�culars 2020-21

Basic Salary (Per Month) Rs. 1,84,000 Rs. 2,02,000 Rs. 2,25,000

Other Benefits

House Rent Allowance (Per month) Rs.1,10,400 Rs.1,21,200 Rs.1,35,000

Special / Floa�ng Allowance (Per month) Rs. 2,04,550 Rs. 2,26,150 Rs. 2,53,750

Ex-gra�a payment as per the policy and criteria of the company.

Club Fees: Annual fees for maximum of Rs. 25000 per annum for two clubs.

Performance Bonus

He shall be en�tled to performance (Financial and

Func�onal) related Bonus or any other allowance /

Perquisites as may be approved

by

the

Board

of

Directors and remunera�on commi�ee as per policy

and criteria

of

the

company.

Rs. 28,00,000

Rs. 33,00,000

Rs. 36,00,000

Term Incen�ve: He shall be en�tled to term incen�ve

on the expiry of this contract period

Rs. 25,00,000

2019-202018-19

Perquisites / Allowances to be considered in the computa�on of ceilings of remunera�on in Sec�on IV of Part II of Schedule V of the Companies Act, 2013

Medical Re-imbursement:� For self and family subject to the maximum ceiling of exemp�on under Income Tax Act.

Group Insurance, Personal Accident Insurance and Mediclaim Insurance for self and family as per the policy of the company

Terms and Condi�ons :

1. The Whole �me Director shall not become interested or otherwise concerned directly or indirectly in any buying or selling agency of the company without the prior approval of the Board of Directors or any other approvals as may be necessary.

2. The Whole �me Director shall not be en�tled to si�ng fee for a�ending Board/Commi�ee Mee�ngs of the Company.

3. The Whole �me Director shall be liable to re�re by rota�on as per provisions of the Companies Act, 2013.

4. The Whole �me Director shall exercise such powers and func�ons on such terms as the Board of Directors of the company may prescribe from �me to �me.

5. The Board of Directors shall have the power to alter, modify, revoke or withdraw all or any of the powers so conferred on whole �me director any �me during his tenure.

The terms and condi�ons of appointment of the above Director shall be open for inspec�on by the Members at the Registered Office of the Company during normal business hours on all working days from 11.00 am to 2.00 p.m. and shall also be available on the website of the company.

None of the Directors of the Company or Key Managerial Personnel or their rela�ves except Mr. Sanjeev Kumar Masown is concerned or interested in the aforesaid resolu�on as set out at Item no. 10 of the No�ce.


KDDL Limited

10

Brahm Prakash Kumar Company Secretary

Membership no. 7519

By order of the Board Date: 11 June, 2018 Place: Gurugram, Haryana

KDDL Limited

11

Brief Resume of the Director being re-appointed at the Annual General Mee�ng of the Company :

Name of the Director : Sanjeev Kumar Masown

Date of Birth : 30th September, 1969

Date of first

Appointment

:

30th

May, 2016 as an Addi�onal Director

Qualifica�on and

experience in specific

func�onal areas

:


which he holds

Directorship

: Satva Jewellery & Design Limited


which he holds the

membership of the

Commi�ee

:

KDDL

Limited

Stakeholders

Rela�onship

Commi�ee

Member

Disclosure of

rela�onships between

directors inter - se;

Not Applicable

Shareholding as on 31��

March, 2018

2,000 Equity Shares

He is M.Com and Cost & Management Accountant (CMA).

He has more than 25 years of experience in different

manufacturing Companies. He is also Chief Financial Officer

(CFO) of the Company since 2011 In addi�on to his role as

CFO, he is the Business Head for Precision Engineering,

Watch Dials and Packaging business of the Company.

12

KDDL Limited

THSECOND ADDENDUM TO NOTICE OF 38 ANNUAL GENERAL MEETING OF KDDL LIMITED

thIn con�nua�on to the No�ce of 38 Annual General Mee�ng [“AGM”] of the members of KDDL Limited [“the thCompany”] dated 14 May, 2018, Hotel Timber Trail thscheduled to be held on Saturday, 14 July, 2018 at 12:30 p.m. at

Resorts, Parwanoo, Dis�. Solan, (H. P) -173220, which is being sent herewith to members of the Company, NOTICE is

hereby given that the following addi�onal Special Business will also be transacted at the AGM and this No�ce be read

in con�nua�on to the aforesaid no�ce.

SPECIAL BUSINESS:

11. Further Issue of Equity Shares through Preferen�al Allotment


"RESOLVED THAT in accordance with:

a) the provisions of Sec�ons 42, 62 and other relevant provisions of the Companies Act, 2013 read with the Companies

(Prospectus and Allotment of Securi�es) Rules, 2014 and the Companies (Share Capital and Debentures) Rules, 2014

(including any statutory modifica�on(s) or re-enactment(s) thereof for the �me being in force) (“the Act”) and

b) Lis�ng Agreement entered into by the Company with the Stock Exchanges where the equity shares of the Company

are listed and traded, read with the provisions of the Securi�es & Exchange Board of India (Lis�ng obliga�ons and

Disclosure Requirements) Regula�ons, 2015(including any statutory modifica�on(s) or re-enactment(s) thereof for

the �me being in force) ) (“Lis�ng Regula�ons”) and

c) the provisions of Chapter VII of the Securi�es & Exchange Board of India (Issue of Capital and Disclosure

Requirements) Regula�ons, 2009 (“ICDR Regula�ons") (including any statutory modifica�on(s) or re-enactment(s)

thereof for the �me being in force) and

d) the provisions of Foreign Exchange Management Act, 1999 (including any statutory modifica�on(s) or re-

enactment(s) thereof for the �me being in force) (“FEMA”) and regula�ons made thereunder including the Foreign

Exchange Management (Transfer or Issue of Security by a person resident outside India) Regula�ons, 2017 (including

any statutory modifica�on(s) or re-enactment(s) thereof for the �me being in force) and

e) the relevant provisions of the Memorandum and Ar�cles of Associa�on of the Company and

f) all other applicable rules, regula�ons, statutes, no�fica�ons, circulars, clarifica�ons and/or guidelines, as may be

applicable, as amended from �me to �me by the Government of India (“GOI”), the Ministry of Corporate Affairs

(“MCA”), the Securi�es Exchange Board of India (“SEBI”), BSE Limited and Na�onal Stock Exchange Board of India

Limited ( collec�vely referred to as “Stock Exchanges”), the Reserve Bank of India (“RBI”) and/or any other regulatory

body or authority as may be applicable and

g) subject to all requisite approvals, consents, permissions or sanc�ons (if any), as may be required from any

regulatory/statutory authori�es including GOI, MCA, SEBI, RBI and Stock Exchanges or other competent authority or

any bank or financial ins�tu�on ( hereina�er singly or collec�vely referred to as the “Appropriate Authori�es”) as may

be required and


Registered Office: Plot No 3, Sector-III, Parwanoo, Dis�. Solan, (H. P) -173220

Email: investors.complaints.com, Website: www.kddl.com

Phone: 0172-2548223/24 & 27, Fax: 0172-2548302

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h) subject to such terms, condi�ons, s�pula�ons and modifica�ons as may be prescribed, imposed or suggested by

any of the Appropriate Authori�es while gran�ng any such approvals, permissions and sanc�ons, which may be agreed

to by the Board of Directors of the Company (hereina�er referred to as the “Board” which term shall be deemed to

include any commi�ee cons�tuted or to be cons�tuted by the Board to exercise its powers including the powers

conferred by this resolu�on) and

i) subject to such condi�ons and modifica�on as may be considered appropriate by the Board, consent of the Company

be and is hereby accorded to create, offer, issue and allot 4,16,666 (Four Lakhs Sixteen Thousands Six Hundred Sixty

Six) Equity Shares of Rs. 10 each ("Equity Shares"), on preferen�al basis for cash at floor price of Rs. 480 (Four Hundred

Eighty) per Equity Share (including premium of 470 per Equity Share) subject to pricing guidelines as defined under the

provisions of ICDR Regula�ons, aggrega�ng upto Rs. 20,00,00,000/- (Twenty Crores only), to the following subscribers :

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RESOLVED FURTHER THAT the allotment of the Equity Shares pursuant to this resolu�on shall be made within 15 days

from the date of receipt of approval of the shareholders, provided that where the allotment of the said Equity Shares is

pending on account of pendency of any approval for such allotment by any appropriate authority, the allotment shall

be completed within a period of 15 days from the date of grant of such approval.

RESOLVED FURTHER THAT the price of the Equity Shares has been calculated in accordance with the provisions of

Chapter VII of ICDR Regula�ons.

RESOLVED FURTHER THAT in accordance with the provisions of ICDR Regula�ons, the “Relevant Date” for the purpose thof determina�on of the price of the Equity Shares to be issued and allo�ed as above shall be 13 July, 2018, being the

thdate falling 30 (thirty) days prior to the date of this Annual General Mee�ng being held on 14 July, 2018 to approve this

offer.

RESOLVED FURTHER THAT the allotment of the Issue Shares shall be made in dematerialized form.

RESOLVED FURTHER THAT the Equity Shares so issued and allo�ed as above shall be locked in as per the provisions of

Chapter VII of ICDR Regula�ons.

RESOLVED FURTHER THAT the Equity Shares shall be listed on the stock exchanges, where the exis�ng equity shares of

the Company are listed.

RESOLVED FURTHER THAT the Equity Shares so issued by the Company to the Subscribers on a preferen�al basis, shall

be subject to the provisions of the Memorandum and Ar�cles of Associa�on of the Company and shall rank pari passu

with the exis�ng equity shares of the Company in all respects, including as to dividend.

RESOLVED FURTHER THAT for the purpose of giving effect to this resolu�on, the Board be and is hereby authorised to

do and carry out all such acts, deeds, ma�ers and things as it may in its sole discre�on deem necessary for such

purpose, including without limita�on, appointment of merchant bankers, consultants, solicitors, bankers, registrars,

scru�nizers or any other agencies as may be required, and entering into arrangements for lis�ng, trading, depository

services and such other arrangements and agreements as may be necessary, with full powers to se�le any ques�on,

difficulty or doubt that may arise at any �me in rela�on to the issue or allotment of said Issue of Equity Shares and

u�lisa�on of issue proceeds thereof and to form a Commi�ee of the Board and delegate and/or all or any of its power

to such Commi�ee (including any officer of the Company).

RESOLVED FURTHER THAT for the purpose of giving effect to the issue, Chairman & Managing Director, Whole Time

Director cum Chief Financial Officer and Company Secretary of the Company be and are hereby authorised severally on

behalf of the Company, to sign all documents and se�le all ques�ons, difficul�es, or doubts that may arise in regard to

the issue, offer and allotment of the securi�es and u�liza�on of the issue proceeds as they may in their absolute

discre�on deem fit, including but not limited to seeking lis�ng of the said Issue of Equity Shares on the relevant stock

exchange(s) as appropriate, opening bank accounts on behalf of the Company, making, amending and finalizing all

applica�ons for any approvals, consents or permissions as may be considered necessary, proper and expedient,

making required disclosures to the stock exchanges where the securi�es of the Company are listed and are authorised

to do all such acts, deeds, ma�ers and things as they may in their absolute discre�on deemed necessary or desirable

for such purpose in the best interest of the Company to give effect to the aforesaid resolu�on without being required to

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seek any further consent or approval of the members or otherwise to the end and intent that they shall be deemed to

have given their approval thereto expressly by the authority of this resolu�on."

NOTES:

1. An Explanatory Statement pursuant to Sec�on 102(1) of the Companies Act, 2013 rela�ng to the Special Business as

proposed above to be transacted at the 38�� is annexed hereto.Annual General Mee�ng (AGM)

2. thThe Board of Directors of the Company (“the Board”) at its mee�ng held on 14 May, 2018 approved the No�ce th thconvening the 38 Annual General Mee�ng (AGM) of the Company scheduled to be held on Saturday, 14 July, 2018.

Also, the Board at its mee�ng held on 11�� June, 2018 considered and approved First Addendum containing the Special

Business to be approved by the Shareholders at ensuing AGM of the Company. Subsequently, the Funds Raising thCommi�ee of the Board of Directors at its mee�ng held on 15 June, 2018 considered and approved this Addendum

containing the Special Business to be approved by the Shareholders of the Company at AGM of the Company.

3. Relevant documents referred to in this Addendum to No�ce of AGM shall be open for inspec�on by the Members at

the Registered Office of the Company during normal business hours (11:00 a.m to 2:00 p.m.) on all working days up to

and including the date of the AGM.

4. All the processes, notes and instruc�ons rela�ng to e-vo�ng set out for and applicable to the ensuing AGM shall thmuta�s-mutandis apply to the e-vo�ng for the Resolu�on proposed in this Addendum to the No�ce of 38 AGM.

thFurthermore, the Scru�nizer appointed for the ensuing 38 AGM will act as Scru�nizer for the Resolu�on proposed in

this Addendum.

EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 102 OF THE COMPANIES

ACT, 2013

ITEM NO. 11

It is proposed to raise the funds to meet the objec�ve of long term capital resources, expansion plans, addi�onal

working capital requirements, to make any further investments in its subsidiaries or other general corporate purposes.

thThe Board at its mee�ng held on 11 June, 2018 cons�tuted a Commi�ee of the Board of Directors namely “Funds

Raising Commi�ee” (“the Commi�ee”) and delegated to the Commi�ee all powers related to funds raising. The thCommi�ee at its mee�ng held on 15 June, 2018, subject to the approval of Shareholders, approved the issue of

4,16,666 (Four Lakhs Sixteen Thousands Six Hundred Sixty Six) of Rs. 10 each ("Equity Shares"), on a preferen�al basis

to the Subscribers for cash at floor price of Rs 480 per Equity Share (including a premium of Rs. 470 per Equity Share)

subject to pricing guidelines as defined under the provisions of ICDR Regula�ons, for a total subscrip�on amount not

exceeding Rs. 20,00,00,000/- (Rupees Twenty Crores only).

The issuance of the Equity Shares to the Subscribers on a preferen�al basis will be subject to customary condi�ons

including applicable governmental and regulatory approvals and other third party approvals. The Equity Shares

allo�ed to the Subscribers shall rank pari-passu with all other equity shares of the Company in respect of all rights

including dividend.

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In terms of the provisions of the Companies Act, 201 and the ICDR Regula�ons, the relevant disclosures / details are

given below :

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7

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